Who can be a guarantor for a mortgage?

They'll look at the applicant's income and savings, their credit history and existing debts. They may even want to know how long the applicant has been in their job. Many people will sail through the lender’s affordability assessments, some may be rejected, and others may need to get a guarantor.

Using a mortgage guarantor can give lenders a confidence boost. If someone agrees to take on this role for a borrower, they're providing the lender with a commitment: if the borrower can't make their mortgage payments, the guarantor will step in to cover them. In some cases, using a guarantor can not only help you get a mortgage in the first place, but it could also allow you to borrow more money.

Whether you’re a first-time buyer looking for help buying a property or someone has asked you to be their homeownership supporter, read on to find out who can be a mortgage guarantor and what the requirements are in the UK.

Who can be a guarantor for a mortgage in the UK?

Typically, lenders offering guarantor mortgages will want the guarantor to be at least 21, have a good credit history and be financially stable. Most people ask a parent or relative to be their guarantor, but you don’t have to be family. A friend can also act as your guarantor, provided they meet the lender's requirements.

You don’t have to be a homeowner to be a guarantor, either. However, being a homeowner can strengthen the application and improve the chances of mortgage approval, as it demonstrates financial stability to lenders. If your guarantor is a homeowner, they could even use their own property to boost your deposit.

Being a guarantor can be risky. So if someone has been asked to help another person get a mortgage, it's a good idea to only say 'yes' if there is trust in the relationship.

If a borrower defaults on their mortgage, the guarantor is equally responsible for making the repayments. As we’ll explain in more detail later, if the guarantor has used their savings to offset the borrower’s mortgage, this could see them lose money.

Keep reading: The risks and benefits of guarantor mortgages

Does a guarantor need a job?

No, a guarantor doesn’t need to have a job, as long as they meet the lender’s criteria and can prove they’re able to manage the borrower’s payments if necessary. Some lenders will only approve guarantors who have a reliable source of income.

In some cases, the guarantor’s income can be used to boost the loan amount. Other lenders will work with those who are willing to use their home or savings to help the borrower get on the property ladder.

Does a guarantor need to be a homeowner?

No, a guarantor doesn't need to be a homeowner to help someone get on the property ladder. They can use their savings or income as security on the borrower's mortgage application instead of their home.

Can someone be a guarantor twice?

It is possible to be a guarantor more than once, as long as you can afford to cover the payments without putting your own finances in jeopardy. For example, you may have helped your son to get a mortgage by agreeing to be his guarantor. It’s possible to do the same for your daughter, but only if you can afford to cover both their mortgage payments (and stay on top of your own expenses) if they were to get into financial difficulties. If a lender thinks you’re taking on too much responsibility, they may be apprehensive about approving the loan.

How much must a guarantor earn?

There is no set amount that a mortgage guarantor needs to earn, but lenders will usually ask for proof of income, savings or assets before making their decision. Mortgage lenders want to know that the guarantor has the ability to cover the repayments on behalf of the borrower.

While there's no minimum income requirement, having a guarantor with a strong, stable income can significantly strengthen your application. In some cases, aspiring homeowners can borrow more money by adding a guarantor with a good income to their mortgage. Technically, this is known as a Joint Borrower Sole Proprietor mortgage, but that’s a bit of a mouthful, so we call it an Income Boost.

Do lenders carry out credit checks on guarantors?

When someone applies to be a guarantor, the lender will carry out a credit check on them. This is usually a ‘soft’ credit search, which means it won’t be visible to other lenders and won’t affect your credit score. However, if the borrower defaults on their mortgage or you have to cover any of their repayments for them, this will be reflected on your credit report.

Becoming a mortgage guarantor can also create a financial association on your credit report between you and the borrower. When guarantors apply for credit in future, lenders may check the credit file of those they're associated with before deciding whether to approve the application. This could cause problems if someone acts as a guarantor for another person who goes on to struggle with debt in future.

It’s a good idea for guarantors to check their own credit report from time to time to make sure that any financial associations are accurate and they’re not harming their score.

If a guarantor no longer wishes to be associated with a certain person, they can submit a ‘notice of disassociation’ to the credit referencing agencies. This should remove the connection.

Can a guarantor have a poor credit history?

It’s unlikely that someone with a bad credit history can be a mortgage guarantor. Lenders want reassurance that if the borrower were unable to pay their mortgage, their guarantor could intervene. If the guarantor has had problems with debt in the past, this can make lenders reluctant to approve the loan.

The higher a person's credit score, the more likely that they'll be approved as a guarantor. But there is no magic credit score that guarantors must have.

Rather than looking at your credit score in isolation, they usually care about the health of your credit report as a whole. So potential guarantors shouldn't worry too much about the number itself.

How do guarantor mortgages work?

There are different types of guarantor mortgages. Here are three of the most common:

1. Using a guarantor’s income (Income Boost)

As you know, your income plays an important role in how much you can borrow. The higher your income, the higher your borrowing potential. If you have a lot of debt or a bad credit score, though, this can reduce the amount that banks are willing to lend you.

As a general rule, lenders tend to multiply an applicant’s income by 4 or 5 to determine how large the mortgage can be.

Let’s imagine you’re buying a house alone and you earn £25,000. If the bank uses an income multiple of 4, you could be offered a mortgage of £100,000.

If you have a deposit of £20,000, this means you could buy a house worth up to £120,000.

It can be hard to find the right property for this price. It’s no wonder so many people feel as though homeownership is out of reach and they’re destined to rent forever.

But let’s imagine your mum also earns £25,000. By combining both your incomes and putting her name on the mortgage, you could potentially double the amount you can borrow.

The best bit is that although your mum’s name is on the mortgage, she won’t own the property itself. That’s why this type of mortgage is officially known as joint borrower, sole proprietor mortgage. At Tembo, we call these Income Boost mortgages, and they are common amongst some of the biggest lenders, including NatWest's Family-Backed Mortgage and Barclays' Mortgage Boost scheme.

If both your parents are working and they meet the bank’s criteria, you could add them both to the mortgage and increase your borrowing potential even further. In fact, you can add up to four people to your mortgage using a Joint Borrower Sole Proprietor mortgage (JBSP).

2. Using a guarantor’s property (Deposit Boost)

If your deposit is what’s standing between you and buying a home, rather than your income, a Deposit Boost can increase your down payment.

Let’s say you wanted to buy a house for £200,000 but you don’t have a 5% deposit saved. With the help of Tembo and an eligible ‘booster’, we’ll have you taking selfies on your doorstep in no time.

Let’s imagine your dad wants to help you boost your deposit but he doesn’t have enough money in his bank account. Our team of mortgage specialists can assess his eligibility and find a way to make it work. If he’s a homeowner, it may be possible to remortgage his property so that some of the equity can be put towards your deposit.

If we were able to take £20,000 out of his property, this could provide you with a 10% deposit for your dream home. If you have savings of your own that can be added on top, you may be able to get a better interest rate or choose from a wider selection of mortgages.

A Deposit Boost isn't a traditional guarantor mortgage, in that there's no connection between the buyer and the Booster. The two mortgages are completely separate, so if the buyer were to default on their mortgage, it wouldn't impact the Booster and vice versa.

3. Using a guarantor’s savings (Springboard mortgage)

A family springboard mortgage is another option, like Lloyds' Lend a Hand mortgage. This type of mortgage allows those without a deposit to buy a home with the help of a relative’s savings. The relative will place their savings into a designated account. They won’t be able to access the money for a set period of time, but it’ll earn interest and be used to offset the mortgage. This means that if the buyer was to get into financial difficulties and couldn’t make their repayments, the lender would take the money from the savings account.

If the buyer makes all their repayments on time, the family member will get their money back once the set period is over.

Which guarantor mortgage is best for me?

When it comes to guarantor mortgages, there’s no one-size-fits-all solution. What helps one buyer onto the property ladder might not work as well for another buyer. That’s why it’s a good idea to speak to an expert mortgage broker to weigh up your options and make sure you get the best deal available.