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Guarantor mortgage calculator

Author: Myles Robinson - Expert Finance Advisor

Posted: Aug 11, 2022

Guarantor mortgage calculator

Firstly, what is a guarantor mortgage?

Our expert mortgage lenders, who are registered by the financial conduct authority, can explain what a guarantor mortgage is and if you can have the best guarantor mortgage on the market.

Guarantor mortgages are a way of getting you on the property ladder if you are struggling to do this by yourself. This could be due to poor credit history, purchase price, or other financial reasons. Usually, a parent has a savings balance for a first-time buyer’s home loan.


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Why is a guarantor mortgage calculator useful?

Calculating rates for guarantor mortgages is essential as you can know what to expect before speaking with a qualified advisor.

Family link mortgages have to accept joint responsibility that you will make the monthly repayments; if not, the guarantor would have to cover making mortgage payments.

A mortgage broker would recommend a guarantor mortgage if you have a family member with money in a savings account who is willing to pay the deposit and be your mortgage guarantor.

The mortgage would belong to you, but the mortgage guarantor would have to pay the monthly mortgage if you couldn’t do this yourself.

Many variables go into determining the amount of your loan amount.

It is impossible to give an exact number because every case and mortgage lender is unique. A mortgage calculator indicates the maximum amount based on income and expenses. It also shows how much it will cost to repay the mortgage payments.

Speak with one of our mortgage brokers today for advice and further information or a mortgage application. Our mortgage brokers are registered by the financial conduct authority and financial services register.

You will need to contact the best guarantor lender for an exact figure. For more information on mortgages, please contact us today. A guarantor mortgage calculator doesn’t tend to be the most accurate as each case and mortgage repayments would differ so widely.

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How does a guarantor mortgage affordability work?

It is not always as simple as it seems to apply for and qualify for a guarantor loan or family offset mortgages.

Although the guarantor doesn’t have the mortgage deeds or owns the property, they are still assessed the same as applicants (credit score and income, age, other commitments like loans, credit cards, etc.). They still have to go through the mortgage application process and prove they can afford the mortgage payments.

Lenders consider income and outgoings to determine how much the guarantor can afford. Read our guide on who can be a mortgage guarantor for UK clients.

The UK currently assesses the guarantor’s income based on basic employment, overtime and bonuses. The minimum is self-employment income (typically 2-3 years of trading).

If you want to know the maximum amount of guarantor mortgage borrowing, UK lenders will multiply your income by 4. For example, a salary of £30,000 per year would result in a maximum loan of around £120,000.

The mortgage broker can lend up to 5x your income. In most cases, the borrower’s income is not included in any calculation.

The guarantor’s circumstances often limit the mortgage’s length (in years). This is because, more often than not, the main borrower is older than the guarantor. The mortgage broker will limit the mortgage term to applicants over 65.

In other words, if a couple is 25 and their guarantor is 40, then they must limit the mortgage to 25 years to meet the requirements of the guarantor’s retirement. The monthly payments can become more expensive if the term is cut by many years.

Some lenders understand this issue and will accept the mortgage term, provided the guarantor is gone within a specified time.

Keep in mind that lenders may limit guarantor mortgage terms at 25/30 years, regardless of age. This should be considered when calculating your monthly budget.

Read more: How much can I borrow for a guarantor mortgage?

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How to calculate guarantor mortgage rates – Overview

One of the major benefits of a mortgage with a guarantor in some instances is that the borrower does not need to prove any income. This is a great way for students and newly self-employed people to climb the property ladder. Often a guarantor mortgage is used for a first-time buyer.

As lenders pull back from the market, mortgages with guarantor agreements are becoming more accessible to first-time buyers and home movers who want to purchase more significant properties. The right mortgage for you depends on many factors.

Enquire today, and we will help you find the best guarantor mortgage deal on the market.

Contact us free to discuss the lending criteria for different types of guarantor mortgages available for you.

If you have any questions about applying for a mortgage without a guarantor, we are happy to help get you the approval you require and offer mortgage advice.

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