The Truth About Guarantor and Family Assist Mortgages

A clear guide to guarantor and family assist mortgages for first-time buyers. Learn how they work and the risks to know.

For first-time buyers struggling with deposit or affordability, family support can make the difference between buying now and waiting years. That’s where guarantor and family assist mortgages come in. But while they can be a fantastic option, they also come with responsibilities and risks for both buyers and family members.

Here’s the truth about how they work — and what to think about before going down this route.

What is a guarantor mortgage?

A guarantor mortgage is when a family member, usually a parent, agrees to cover repayments if you can’t. It can boost your borrowing power but places a legal responsibility on the guarantor.

What is a family assist mortgage?

A family assist mortgage is slightly different. Instead of guaranteeing repayments, family members put savings or property equity forward as security. This helps reduce the lender’s risk and supports the buyer without taking full responsibility for payments.

How these options help first-time buyers

Both guarantor and family assist mortgages can allow buyers to borrow more or access deals with smaller deposits. They can make homeownership possible sooner, especially in high-price areas.

The risks for family members

For guarantor mortgages, the risk is financial liability if repayments are missed. For family assist mortgages, savings or property placed as security could be tied up or at risk if the buyer defaults. These risks need to be carefully understood before committing.

When family-backed mortgages make sense

These products can be useful if buyers have strong income potential but little deposit, or when house prices are rising faster than savings. They should only be used when both buyer and family are fully comfortable with the risks.

The Bottom Line

Family-backed mortgages can be a powerful solution, but they’re not right for everyone. Honest conversations and clear advice are essential before deciding.

Your home may be repossessed if you do not keep up repayments on your mortgage or other loan secured against it.

• What’s the difference between a guarantor and family assist mortgage?

  A guarantor mortgage involves covering repayments if needed, while family assist uses savings or property as security.

• Do all lenders offer guarantor mortgages?

  No, availability varies. A broker can help you find suitable lenders.

• What happens if repayments are missed?

  In guarantor mortgages, the guarantor becomes responsible. In family assist, the family’s savings or equity may be at risk.