CIS Guarantor Mortgage
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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CIS Guarantor Mortgage (Part 1)
David Sharpstone explains how a guarantor mortgage works.
Podcast approved by The Openwork Partnership on 09/07/2025.
What is a guarantor mortgage? Can I get a guarantor mortgage as a CIS worker?
This question always comes up when a client can’t quite borrow enough. I think there’s a misconception around what a guarantor actually means in the mortgage world in 2025.
I’ve been a mortgage broker since 2007, and back then a guarantor would add their name to a mortgage to give extra credibility to an application.
A guarantor in 2025 is very different. You can still add somebody else to your mortgage application and they don’t necessarily have to live in the property with you. A lot of mortgage lenders allow that, and some allow you up to four people on the mortgage.
The benefit of adding people to the mortgage is that hopefully they have a good income and little in the way of outgoings. There would be no benefit of adding mum if she’s 65 and has a massive mortgage, a Land Rover on finance and a load of other expenses. That’s going to have a negative net effect rather than a positive one.
Otherwise, adding someone can boost your borrowing. Normally lenders can go up to the age of 75 on a mortgage, but some lenders allow a guarantor up to age 80 or 85.
Often the aim is to remove the borrowers as your income goes up, especially if you’re in a career where you start off on a lower income and eventually it will go up. With CIS, unlike being a teacher, doctor or lawyer, there isn’t a guaranteed payscale to refer to. Obviously, as CIS workers become more skilled, their income can go up, but it’s not a prescribed path like in some professions.
If we’re going to add an extra borrower to the mortgage, we really want them to have a low enough age to keep the mortgage payments down. If the person you want to add on is already 60, you’re probably looking at just a 10 to 15 year term, which would really push up the mortgage payments and actually have a negative impact on the plan.
I do a lot of mortgages where we add on a parent as a joint borrower. They don’t live in the property, but we use their income, and they are normally early to mid-fifties. We can do that with most CIS applications.
Do mortgage lenders still accept guarantors? Is it easier to get a mortgage if you have a guarantor as a CIS worker?
Yes, in the sense that they’ll accept a joint borrower – normally a relative. There are CIS-friendly lenders that would accept non-relatives, which is quite a new thing. They don’t necessarily have to live in the property or even be on the deeds of the property, just on the mortgage.
Is it easier to get a mortgage if you have a guarantor as a CIS worker? Well, it depends how much you want to borrow. If your income is sufficient to get the mortgage you need, why add somebody else and create more paperwork? Adding another borrower can create more legal costs too, and potential tax implications.
So it’s not easier if you don’t need it. But if you do, we can add a guarantor and they would be underwritten in exactly the same way as normal. We’d hope they have a good credit score, although if they don’t, some lenders can look at that.
We’d also hope your guarantor has enough years of their life left to have a decent mortgage – where the payments are low enough as we haven’t had to take a short term.
How does a guarantor mortgage work? What types of guarantor mortgages are there?
Whether you’re a CIS worker or not, guarantor mortgages work in exactly the same way.
There are two ways of doing this ‘guarantee.’
I’m using the phrase ‘guarantor mortgage,’ because it’s easy to understand, but it’s not really a guarantor set-up in its true sense. We’re just adding a second, third or even fourth person onto a mortgage application to boost affordability. That’s the main purpose.
By adding people to the mortgage, they each become a joint borrower. They’ve got to decide whether they want to be on the deeds of that property or not. If they’re on the deeds, there are implications for stamp duty land tax, and also for estate planning.
It’s also going to have an impact on whether the guarantor can take out borrowing for themselves in the future, because each person is not only jointly liable for the mortgage, they’re individually liable.
If there are four people on the mortgage, three can’t afford to make the payment but one can, the lender doesn’t care. Each person is liable for the entire mortgage payment, not just a share of it.
If somebody is applying for a mortgage and they’re already a joint borrower on another mortgage, that entire mortgage payment and mortgage balance goes against them. That’s the downside to this.
If you’re adding parents that have paid off a mortgage, it’s probably not going to affect them. We’ve just got to look at whether they are going to be on the deeds as a joint borrower, joint proprietor, or off the deeds but on the mortgage as a Joint Borrower Sole Proprietor (JBSP).
JBSP is very common in today’s market. Lots of mortgage lenders are now allowing that, partly because house prices are rising so much that young people can only get onto the property ladder with the help of a family member.
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Will I be able to borrow more with a guarantor mortgage? How much of a mortgage can I get with a guarantor as a CIS worker?
The whole purpose of adding an extra person onto a mortgage is to borrow more. But my job is to make sure that my advice is sustainable now and in the future. There’s no point adding somebody else onto the mortgage to borrow more if the main person won’t be able to afford it. We’ve got to factor that in.
Just because you can, it doesn’t mean you should. But, yes, adding an extra person as a guarantor means you’ll be able to borrow more. The normal rules are going to apply in calculating how much you can borrow. The mortgage lender would look at the income and outgoings of all the people going on to the mortgage, and factor in their credit profile.
Are they already a homeowner? Do they have other bills that they’re liable for, such as council tax, gas and electricity? Are there children and financial dependents? It all goes into the melting pot to work out mortgage affordability, so it’s impossible to give a one-size-fits-all answer there.
Can you get a 100% mortgage with a guarantor?
I can’t remember the last time I did 100% mortgage, but I think it was on a shared ownership property. A 100% mortgage with a guarantor is unlikely, because the risk to the mortgage lender is already right at the edge of what’s possible.
Trying to borrow more by adding extra people increases the risk to the lender, which would reduce their appetite. I’m not going to say it’s impossible, but as we speak in June 2025 only a couple of lenders are doing 100% mortgages.
One is on a normal residential purchase, and I believe you have to be First Time Buyers for that. The other is only on shared ownership, where you can only add on another person if they’ll be living in the property.
Do guarantor mortgages have higher interest rates?
Not unless the other people you add to the mortgage have poor credit profiles. The lender will look at the worst credit profile among the borrowers to judge the rate.
If you’ve worked really hard to get an impressive credit profile and you want to add somebody with a County Court Judgment (CCJ) or a default who doesn’t take care of their finances, you’re going to end up with a worse rate, with a lender that is a specialist in dealing with credit blips.
What documents should I provide for a guarantor mortgage as a CIS worker?
The documents for the guarantor or joint borrower would be everything we normally ask for: evidence of ID, income and address.
We’d want to see a full credit profile before we even speak to mortgage lenders. That’s what I would ask for as a mortgage broker, and most of my contemporaries would too. We’d want to see your deposit funds going back at least four months. I had one the other day where I asked for two years’ evidence of deposit, because I wasn’t comfortable with what I was looking at.
We got there in the end, but sometimes we need the paperwork to build the whole story. It’s pretty standard paperwork for anybody going on a mortgage application and no different if you’re CIS. Your income proof via CIS payslips is the only difference.
What are the risks of a guarantor mortgage? What are the downsides of being a guarantor on a mortgage?
There’s no downside to the person that’s going to be living in the property – effectively they’re getting the home they want. Actually, one potential downside is that you don’t seek advice, and end up in a situation where you’ve borrowed far more than you can pay back.
In reality, that shouldn’t happen because there’s a lot of safeguards to prevent it, but I have seen it. There’s always the downside of borrowing more than you can afford to pay back.
For the guarantor, they’re carrying all the risks. If my son bought a property and I was a guarantor joint borrower, if he doesn’t pay on time, I’ll end up with a black mark on my credit report.
A mortgage lender will write to everybody on the mortgage asking for that money. There’s no risk to the guarantor of them losing their own home, but if they end up with bad credit, they might find it difficult to remortgage for a better deal in the future.
I’m not a tax advisor, but there are also implications for stamp duty, which will influence whether you choose a Joint Borrower Sole proprietor mortgage or become joint proprietors on the property.
There could be an impact for estate planning for the joint borrower, especially if they’re down as property owners with the Land Registry, because it would potentially form part of their estate when they die. That’s something they would need to seek specialist advice on.
What else do we need to know about a CIS guarantor mortgage?
This approach can be really effective to help people onto the ladder. But you and your advisor really need to consider the longer term affordability. It’s all very well that you can do it, but should you? Can you afford it in the future?
I’m pretty sure that your parent, brother or sister won’t want to be on a mortgage with you for the next 30 years. You need to be thinking about your exit strategy to get them off. Will you eventually sell the property and downsize, or move to another area? Or are you confident that your income will go up, and in five years’ time you can remortgage and take it on by yourself? That’s a conversation to have with a mortgage advisor.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
For specialist tax advice, please refer to an accountant or tax specialist.
Approved by The Openwork Partnership on 09/07/2025.
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