Parent Guarantor Mortgage

Podcast approved by The Openwork Partnership on 01/10/2025.

Can parents be guarantors for a mortgage? Can you use your parents as a guarantor?

Yes, although the mortgage industry has developed and diversified over the years and most typical guarantor mortgages have been phased out over time. You rarely see a parent guarantor mortgage in today’s market.

Instead, lenders typically offer Joint Borrower Sole Proprietor (JBSP) mortgages. This is where a parent is on the mortgage, so their income still helps, but they don’t own the property. There are some slight differences between the two types of mortgage, which we’ll explain as we continue.

A few building societies still allow for guarantors on niche products, so technically they are still available.

Is it easier to get a guarantor or JBSP mortgage with your parents?

It is. Most people buying their first home are quite young and their income is not at their full potential. A parent can help get them onto the property ladder, by making sure that the mortgage is affordable right now.

In the future, the client can take the mortgage over on their own, as their income increases. That’s the whole idea of a Joint Borrower Sole Proprietor mortgage.

Is there an age limit when parents are mortgage guarantors?

Yes, there is. That’s one of the aspects that often comes up. Typically, most lenders will cap a mortgage at around age 75.

This can be key, because if a parent is near to retirement, it can have an impact upon what type of income is used – and perhaps the overall mortgage affordability. Age is definitely an important aspect to consider.

What are the risks to parents of being a guarantor on a mortgage?

That’s one of the things that a mortgage broker can really highlight – the risks to the client themselves, and also to the parents helping them.

The parents and the client are jointly liable for the full mortgage amount for the duration that they are named on it. Any issues with the mortgage going forward can affect the parents’ credit files too – such as missed mortgage payments or payment holidays.

The full Joint Borrower Sole Proprietor mortgage amount would also need to be factored into the parent’s affordability. For example, if they were looking to move home in the future or to remortgage their own home, it will reduce how much they can afford. That’s something we would speak to them about.

Do the parents and child both need good credit for a guarantor mortgage?

Typically, yes. Both applicants would need a good solid credit rating, ideally. If there are any past issues on the credit file, a broker will assess those to find a suitable mortgage option. Ultimately, it’s a factor that we need to consider.

Can a parent and child get a guarantor mortgage with a gifted deposit? Do you need a deposit for a guarantor mortgage?

Yes, and it’s typically a minimum of 5%. Gifted deposits by most lenders are widely accepted, which is great news for borrowers and their parents. Most Joint Borrower Sole Proprietor mortgages are available up to a 95% Loan to Value.

There are even a couple of no deposit options available with specific lenders. For example, there’s a savings backed product where the client’s parents can lock away savings, typically for up to five years, and use this to support a 10% deposit for a client [information correct at the time of recording in September 2025].

Again, the individual mortgage broker can tailor that specifically to your family circumstances and advise on the correct mortgage.

What power does a parent guarantor have?

This is one of the biggest risks to parents considering being a guarantor or going on a Joint Borrower Sole Proprietor mortgage – they will have no financial control. They’re not listed on the property deeds – they are purely there as a financial backup, with no ownership rights. That needs to be explained and understood by the parents before they enter into such a commitment.

If a parent is a guarantor on a mortgage, how long are they liable?

Usually the parent is liable for the full term of the mortgage. If the mortgage runs for 20 years, they would be liable for 20 years – or until a point where the client is financially stable enough to bring the mortgage over to their sole name.

A mortgage broker will work with the client on a five or 10 year plan, so that when their income is sustainable and high enough, they would take over the mortgage and the parents would be released from the liability.

Do parents need to already own their own property to be a guarantor?

With the two different schemes we’ve mentioned today – the guarantor and the Joint Borrower Sole Proprietor – there might be slight differences in what lenders require.

Typically, with guarantor mortgages, lenders like the parents to own a property. If there are difficult times in the future, that property could offer the lender security. With Joint Borrower Sole Proprietor, it’s helpful, but it’s not a necessity for parents to be homeowners.

How can a mortgage broker help? Anything else you’d like to add?

The main difference between walking into a bank and going to see a professional mortgage broker is that a broker will sit down to really understand you and your family’s circumstances. They’ll tailor the mortgage to your situation, and recommend the most appropriate lender.

We know the lenders’ criteria extremely well. We understand exactly what they’re looking for and what documents they will ask for. We can really tailor things to you. If you just walk into a bank, you’re unfortunately restricted by the criteria for that one individual lender.

As brokers, we are looking to build relationships and build a long-term plan with you. A mortgage should involve a series of reviews over time, tailoring that mortgage to suit changing individual circumstances.

A broker that knows you and your situation can be a great help.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Approved by The Openwork Partnership on 01/10/2025.