Skip to main content

Can I get a mortgage with a guarantor?

Guarantor for a mortgage

The good news is, yes! You may be able to get a mortgage with a guarantor loan. Getting on the housing ladder can be difficult, but whatever your dream home looks like, a guarantor loan could help you achieve it. Here’s what you need to know to help you decide if a guarantor mortgage might work for you.

Who are guarantor mortgages for?

Guarantor mortgages are for those whose financial circumstances might normally put lenders off. It could be that you have a low credit score or don’t have enough money for a deposit. Or you might just be starting out in your adult life and have no or very little credit history at all. Having a guarantor means that if you’re unable to keep up repayments, they will step in and pay for you. With that extra bit of security, lenders see you as less risky and so are more likely to grant your application.

Guarantor loans are often aimed at first time buyers who are struggling to get on the ladder, but they can be sought in other circumstances too. For example, some mortgage lenders also offer guarantor mortgages for those who wish to step up the ladder or want to advance money or remortgage to carry out home improvements. It could also be that you are self-employed and don’t have enough years of published accounts behind you.

How much deposit will I need?

The more deposit you can put down, the better. It’s normally somewhere between five and twenty-five percent of the value of the home. For example, if your dream house costs £180,000, you need a minimum of £9,000 deposit.

What are the other costs when buying a house?

What are the other costs when buying a house

There are a number of costs involved in buying a house that you need to be aware of. So it’s a good idea to save for these too, not just the deposit. Some costs are dependent on the type of house or the costs, so do a little research to see what extras you might have to be prepared to pay. Here are some of the things to keep an eye out for;

  • Solicitor’s fees
  • Removal costs
  • Fixtures and fittings costs
  • Buildings insurance
  • Mortgage valuation fees
  • Arrangement fees
  • Stamp Duty (or Land and Buildings Transaction Tax in Scotland) which varies depending on the price banding of the home
  • Survey Costs

How much can I borrow for a mortgage?

As a general rule of thumb, the amount you can borrow is around 4-5 times your monthly income. It's a lot more complicated in reality as lenders will look at a range of things, including your personal circumstances, employment details and amount of deposit. They will also be looking to see whether you can afford to make monthly repayments on a long-term basis. Using the rule of thumb just gives you an idea of the price range you may be able to look within. You can also find mortgage calculators online. Most banks and mortgage lenders have one on their websites.

There are a number of help-to-buy schemes for first-time buyers. These are government-backed and aim to help people get onto the property ladder. To find out more read our guide for first-time buyers.