A guarantor mortgage is a unique home loan for low deposit borrowers which is secured by a third party, usually a parent (or a profiled employer). The guarantor provide their home or other assets as security against the loan - Their home could be repossessed (in addition to that of the borrower) if repayments are not made. A guarantor doesn't have the same property rights as a co-signor since their name is only on the mortgage and not on the title of the property (stamp duty avoidance on second home). Unlike a co-signor, the guarantor typically becomes liable for default only after we have exhausted all other means of collection against the primary borrower.

We offer guarantor mortgages partly because of the difficulty first time buyers (esp low income earners) have getting on the property ladder. Parent guarantor mortgages can help children buy their first home. We would want to know if your guarantor can pay off their own existing debts as well as the new mortgage. Someone with direct financial links to you, such as your spouse, may not be eligible - you can make a joint application with your spouse instead. This type of mortgage is usually for first time buyers who have pre-existing homeowner parents, but cannot get a mortgage on their own. Can be used in the following circumstances:

• do not earn enough

• cannot save a big enough deposit

• have a bad credit record

If all mortgage repayments are made on time, the mortgage works in the normal way. This means the guarantor does not have to pay anything. But it’s important to understand that a guarantor could lose the property or other security they used to guarantee the mortgage if repayments are missed (If too many payments are missed).

Guarantor mortgages are strictly available to first time buyers (owner-occupiers) and not available for rental property or second homes.