How a guarantor mortgage works
Mortgage lenders assess applications on income, deposit and credit history. When any of these fall short, a guarantor's financial strength can fill the gap. The guarantor signs a legally binding agreement to make the mortgage payments if the borrower defaults. Most lenders secure this obligation against the guarantor's own property as a second charge, or by holding a portion of the guarantor's savings in a designated account linked to the mortgage.
The security arrangement matters greatly. In a property-secured guarantee, the lender can pursue the guarantor's home if the borrower cannot pay and the property is repossessed and sold at a loss. In a savings-linked product (sometimes called a springboard or family deposit mortgage), the security is a cash sum lodged by the guarantor, typically 10% of the purchase price, held for a set period (often five to ten years) and then returned with interest if no arrears have occurred.
Because the guarantor takes on real financial liability without owning the home, lenders require them to take independent legal advice from their own solicitor before the mortgage completes. This ensures the guarantor fully understands what they are signing and is not under undue pressure. Skipping this step is not an option with regulated lenders.
Family-support mortgage options compared (2026)
Several structures let a relative help you buy. They differ in who is liable, whose name appears on the title, and whether the relative's money is at risk or merely locked.
| Option | How it helps | Relative on title deeds? | Relative's money or home at risk? |
|---|---|---|---|
| Guarantor mortgage (property-secured) | Relative guarantees repayments; lender takes charge over their home | No | Yes, their home is security |
| Guarantor mortgage (savings-secured) | Relative lodges savings as security for a fixed period | No | Locked, returned if no arrears |
| Joint borrower sole proprietor (JBSP) | Relative's income boosts affordability from day one | No | Yes, jointly liable for payments |
| Family offset mortgage | Relative's savings offset the mortgage balance, reducing interest | No | Accessible but offset against loan |
| Springboard / deposit-boost | Savings held as 10% security for 5 years, then returned | No | Locked for fixed term |
| Gifted deposit | Outright cash gift towards the deposit | No | No risk; gift with no stake |
JBSP is increasingly popular because the relative avoids a second-property stamp duty surcharge by staying off the title deeds. Compare structures carefully with a broker.
Joint borrower sole proprietor mortgages
The joint borrower sole proprietor (JBSP) mortgage has become the most widely used family-support product in recent years. It allows a parent or other relative to be named on the mortgage (so their income is assessed for affordability) while only the buyer appears on the title deeds as the legal owner.
This has a significant tax advantage: because the relative does not own any share of the property, they are not subject to the 3% stamp duty surcharge that applies to second homes or additional properties. If the parent still owns their own home, a standard joint mortgage or transfer into joint names would trigger the surcharge; JBSP avoids it entirely.
The relative is still jointly and severally liable for the mortgage payments, which means the lender can pursue either party for the full debt. The arrangement is typically reviewed at remortgage, and once the borrower has sufficient equity and income to qualify alone, the relative can be removed from the mortgage without a property sale.
Who can act as a guarantor or JBSP applicant
Lenders set criteria to ensure the guarantor could genuinely step in if needed:
- Usually a parent or close family member with stable finances; some lenders accept siblings or grandparents.
- Sufficient income or equity to cover the borrower's mortgage on top of their own existing financial commitments.
- A clean credit history with no defaults, CCJs or recent missed payments.
- An age that means they will not exceed the lender's maximum age at the end of the mortgage term (often 70 to 75).
- Willingness to take independent legal advice and, for property-secured guarantees, to accept a legal charge over their home or savings.
How to set up a guarantor or JBSP mortgage
1. Assess both sets of finances together
A whole-of-market broker reviews the borrower's income, deposit and credit profile alongside the guarantor's finances to identify lenders that accept the specific arrangement needed.
2. Choose the right structure
Select between a traditional guarantor deal, JBSP, or savings-as-security product based on tax implications, who has savings versus property, and the level of liability each party is comfortable accepting.
3. Guarantor takes independent legal advice
The guarantor or JBSP applicant must consult their own solicitor separately, not the borrower's, to confirm they understand the commitment. The lender will require written confirmation this has happened.
4. Complete the mortgage
On completion, the lender registers any charge against the guarantor's property or holds the savings deposit. The borrower owns the property and makes the monthly payments.
5. Review and release
Once sufficient equity (often 20% to 30%) and a clean payment history are established, apply to remortgage in the borrower's sole name and release the guarantor or return the savings security.
Costs and tax considerations
Guarantor mortgages can carry slightly higher interest rates than mainstream products, reflecting the more complex structure and the lender's additional administration. The guarantor will incur legal fees for their independent advice, typically around £200 to £500, which the borrower usually pays as a matter of good practice even though the obligation falls on the guarantor.
For JBSP arrangements, the key cost consideration is stamp duty. The buyer pays SDLT (or LBTT/LTT in Scotland and Wales) only on their own purchase; no additional surcharge applies because the relative is not acquiring any property interest. This contrasts with a joint mortgage where both names are on the title, in which case the relative's existing home ownership triggers the 3% surcharge on the full purchase price.
Income tax and capital gains tax are the borrower's responsibility as the sole owner. The guarantor or JBSP relative has no rental income to declare and no capital gain on sale since they hold no ownership stake.
Real risk for the guarantor
If the borrower misses payments, the guarantor must step in immediately. If the property is repossessed and sold for less than the outstanding debt, the lender can pursue the guarantor for the shortfall against their home or savings. Missed payments can also damage the guarantor's own credit file. Life insurance and income protection cover for the borrower significantly reduce this risk; arrange both before the mortgage completes and make sure the guarantor is aware they exist.