Updated: April 19, 2024
Guarantor Mortgage Borrowing Limits
Trying to understand how much you can borrow with a guarantor mortgage? The limits are surprisingly high!
Find out all the answers in our in-depth guide.
No impact on your credit score
The amount you can borrow with a guarantor mortgage will be determined by your lender, based on a combination of your personal financial position and those of your guarantor.
In this article we’ll look at how these circumstances influence the provider’s decision and show exactly how a guarantor can strengthen your mortgage application.
How much can you borrow with a guarantor mortgage?
There is no set monetary amount or specific loan to value (LTV) for guarantor mortgages. Some providers set a maximum LTV, but it is possible to get a 100% mortgage. Each lender has their own method of calculating the amount you can borrow based on how the additional security of the guarantee strengthens the mortgagee’s application.
The amount you’re offered will be based on a multiple of your salary, anywhere between 4.5 and six times your annual income. With a guarantor behind you, your chances of securing one of the higher income multiples may improve.
Try our calculator below to get a rough idea of your maximum borrowing.
Guarantor Mortgage Calculator
This affordability calculator can tell you how much you can potentially borrow from a mortgage lender. Simply enter your total household income below and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.
Some lenders would consider letting you borrow
This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.
A minority of lenders would consider letting you borrow
This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.
Get Started with an expert broker to find out exactly how much you could borrow.
The way the mortgage is assessed will depend on the way in which the guarantor is ‘supplying’ the security.
This could come from:
- Savings – Typically locked in an account
- Equity – Lenders take out a charge against the guarantor’s property
- Earnings – Can come from salary, pension or any other income source
Savings and equity guarantees are considered in lieu of all or part of the deposit and add security to the loan. Boosting the income on an application will help to close any affordability gap.
Example loan amounts
As you can see from the table below, the added security of having a guarantor can significantly increase the amount that can be borrowed.
The example figures are based on a guarantor who owns a property worth £400,000 with an outstanding mortgage balance of £100,000 and has an annual income of £30,000.
| Mortgagee’s household income | Example loan amount without a guarantor | Example loan amount with a guarantor |
| £20,000 pa | £100,000 | £200,000 |
| £30,000 pa | £155,000 | £256,250 |
| £40,000 pa | £210,000 | £342,500 |
| £60,000 pa | £330,000 | £442,500 |
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How much does the guarantor need to earn?
Your guarantor need not actually be employed or have any income at all. They can use savings or property as collateral instead. Essentially, lenders are concerned with making sure the mortgage will be paid in the event that the main borrower experiences financial difficulties.
If your circumstances do not match the eligibility requirements of high street lenders, there are specialist lenders who offer a more flexible approach to assessing applications.
Many of these will only accept applications via brokers.
Does being a guarantor affect your own borrowing capacity?
Simply being a guarantor will not affect your ability to borrow money. Your status as a guarantor would only influence any future applications you make if you are required to take over responsibility for making repayments due to the borrower not meeting their obligations.
Lenders will carry out a ‘soft’ credit check which doesn’t show on your credit file and you may be asked to declare your guarantor status on future mortgage or remortgage applications.
Provided the loan is being repaid there is no reason why it should affect your borrowing capacity.
Your credit record will show a financial association with the mortgagee, but once again there is no need to be concerned about this negatively affecting your credit score unless they miss payments.
If you are required to make payments on behalf of the other party, this may show on your credit file. Provided payments are made on time, the only way this should influence any future application you make for credit will be related to affordability.
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How a broker can help
Guarantor mortgages can be a bit of a minefield if you are not an expert as it can be difficult to know how to structure the application and which lenders to approach.
People using a guarantor are often facing difficulties obtaining a standard mortgage because of affordability issues, low deposit amount or bad credit. Going directly to a lender when adding a guarantor to your application and being rejected might not mean you can’t successfully apply elsewhere, but it will limit your options even further.
We work with independent brokers who will discuss your circumstances, and those of your guarantor, to advise on the best way to maximise the amount you can borrow.
Other things to consider
Other things to consider when deciding whether to apply for a guarantor mortgage include:
Guarantor mortgages are commonly used to enhance an application for first time buyers. However, lenders tend not to allow them to be used jointly with a government Help to Buy scheme.
Before you decide which option is best, you should speak to an independent broker to discuss the alternatives.
While guarantors are generally associated with necessity, some shrewd borrowers have been known to boost an application in order to get a better deal by increasing the size of their deposit and lowering the loan to value.
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Our broker matching service will put you in touch with an independent broker who specialises in all types of guarantor mortgages. A brief phone call is enough to identify the ideal broker to assess your circumstances and advise whether a guarantor mortgage or alternative product is right for you.
They will know the best providers to apply to and can act as an advocate for you with a specialist lender if necessary.
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Pete Mugleston
Mortgage Expert, MD
About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!
