How much does a guarantor need to earn?

Want to understand the role of a guarantor? From how much a guarantor needs to earn, to their rights and responsibilities, here are the key facts.

Smiling dark haired woman wearing a green dress, stood in front of some trees.

06.01.25

Jasmin

It’s one of the first questions you’re likely to have if you’re searching for a guarantor to help you get a mortgage, loan, or rent a property. Or maybe you’re considering acting as a guarantor yourself – and are wondering if you can afford it.

Cutting to the chase, there’s no set amount a guarantor needs to earn. But a guarantor agreement is a significant legal and financial undertaking, so understanding what’s involved is crucial.

Let’s look at the fundamental aspects of guarantor agreements in the UK. From the financial responsibilities involved, to how much a guarantor needs to earn and how long they’re liable.

What is a guarantor?

A guarantor is someone who’s promised to pay another person’s debt if that person fails to repay a loan or meet other financial obligations.

Two common types of guarantor are those for loans (for instance, mortgages) and for renting a property.

When you agree to be a guarantor, you accept responsibility to help someone else secure a loan or other financial agreement, who may not be eligible for an application otherwise. It’s essentially saying to the lender or landlord: ‘Don’t worry, if this person stops paying you, I’ll fill the gap.’

And this means if the guarantor can’t meet the financial obligations, they could face legal claims for the outstanding amount.

It’s important to understand that a guarantor isn’t a ‘primary party’ to any agreements, though. So if you’re renting a home, the guarantor won’t be listed as a tenant. 

Equally, a guarantor for a mortgage won’t appear as a joint owner of the property. They don’t own a share and won’t appear on the deeds. But the guarantor is legally responsible for repayments if the other person falls behind.

What does a guarantor pay for?

Ideally, the guarantor won’t pay for anything… if it all goes to plan. They’re only there in case a borrower doesn’t keep up with their repayments, or a tenant stops paying their rent.

But if there are any issues, a guarantor is responsible for ‘outstanding obligations’ (i.e., any money the borrower or tenant owes). The guarantor must repay this money within the timeframe set out in their contract. If they don’t, they could face legal action which might also affect their credit rating.

When it comes to acting as a guarantor for renting, the contract should state all responsibilities – such as covering unpaid rent for the full length of the tenancy. A guarantor might also have to pay for damages or extra fines and interest on unpaid rent.

How much does a guarantor need to earn?

There isn’t a set amount. But unless they’re relying totally on savings, they’ll need enough income to comfortably cover the agreed monthly repayments. 

To pass most lenders and estate agent’s affordability checks, a good rule of thumb is a guarantor’s monthly income should be at least four to five times the monthly repayments.

Say you’re renting a property for £1,000 a month. Your guarantor may need to earn £4,000 a month. It’s the same for mortgages. So if your mortgage costs £700 a month, a guarantor may need to earn at least £3,150 a month. 

Each lender has their own rules on who qualifies and how much they need to earn. So the amount could be higher or lower than this.

What if my guarantor doesn’t earn enough?

There’s no specific amount a guarantor must earn. 

The important thing for lenders and landlords is your guarantor can meet any repayments. This doesn’t necessarily have to come from income. The money could come from savings or property assets.

While some lenders or landlords will only accept a guarantor with a steady income, this isn’t always the case. A guarantor doesn’t have to ‘earn’ anything at all, providing they meet the lender’s criteria. A good credit history is arguably more important than current earnings…

Someone with a low credit score probably won’t be accepted as a guarantor.

It’s all about giving the lender confidence. A potential guarantor with a low credit score will cast doubts on their ability to reliably make payments.

Who can be a guarantor?

First things first, you must be an adult living in the UK. Most banks and lenders only accept guarantors over 21 - some also have maximum age limits.

You’ll need a good credit score and enough income or savings to cover any payments set out in your contract.

It helps if you own a property, although this isn’t always necessary.

While guarantors are often close relatives (like a parent or sibling), they don’t have to be. Some lenders have a requirement for you to have known each other for at least two years. But as long as they meet the lender’s UK guarantor requirements, anyone can be one.

And if you’re specifically wondering who can be a guarantor for renting – the requirements are pretty much the same. Any family or friends can act as a guarantor for renting, but they usually need to live in the UK and own a property. 

At the end of the day, it’s up to the landlord who they accept. 

What does a guarantor need to qualify?

Each lender, estate agent, or landlord will have their own requirements for who gets the green light. Aside from the essentials set out above, a guarantor usually has to provide:

  • Proof of address and identification. Normally a driving licence, passport and bank statements or utility bills listing their address.

  • Agreement to credit searches; looking at their credit report, assessing past borrowing and financial stability.

  • Current wage slips. Or if they’re retired, proof of income (i.e. from investments) or proof of savings. This would usually be a bank statement.

How long is a guarantor liable?

It depends on your contract. If you’re a guarantor for a loan, it comes down to what your agreement says. This could be until the loan is paid back in full. 

Many mortgage lenders allow borrowers to remortgage and remove guarantors from agreements, once they’ve built up enough equity. This means a guarantor doesn’t remain liable for the full length of the mortgage.

(Equity is the amount of your home that you own. Say the property cost £200,000 to buy: you paid a £50,000 deposit and the rest was a £150,000 mortgage. This means you have 25% equity in your home. Your equity will go up the more you pay towards your mortgage, until you own 100% of your home.)

Each mortgage provider has different rules, meaning there’s no set amount of equity needed to remove a guarantor. Being able to remove them will also depend on the borrower’s payment history (i.e. if you’ve paid on time each month). So it’s always best to ask your mortgage lender about their specific policies.

How long does a guarantor stay on a tenancy agreement?

Just like with loans and mortgages, it depends on what your contract says.

Guarantors normally stay on a tenancy agreement until the end of the tenancy. This means the landlord is covered in case of unpaid rent and damages.

A tenancy agreement should state the length of the rental period and when the guarantor’s responsibilities end. They can either be fixed-term (e.g. lasting for 12 months) or periodic (usually on a monthly rolling basis).

  • For fixed-term tenancy agreements, the guarantor’s responsibilities won’t extend beyond this period. It’s possible to renew the contract, but all parties will have to agree to this.

  • For periodic agreements, the guarantor can remain for the whole tenancy – meaning liability can extend indefinitely. 

Keep this in mind: once you’ve agreed to be a guarantor (and signed appropriate contracts), you can’t back out. This is because the loan, rental, or mortgage decision was based partly on your credit history, proof of income, and savings.

Is renting without proof of income in the UK possible?

Given the binding nature of guarantor agreements, is it possible to rent a property without proof of income – either from the main tenant or a guarantor?

In short, it’s possible. But you’ll probably find it difficult.

There are many reasons someone might not have proof of income. Perhaps you’re a student, maybe you’ve moved to a new area, waiting for a new job to start, or come to the UK for the first time.

In these situations, it’s best to be upfront with estate agents and landlords. Tell them why you can’t provide proof of income and try to put their mind at ease.

For instance, do you have enough private savings to cover the rent? Could your new job provide an offer letter detailing your future salary?

Some landlords accept a certain amount of rent upfront (e.g., six months in advance). You could also provide references from previous landlords to give even more confidence. But if upfront payments aren’t something you can afford, you’ll probably need a guarantor with proof of savings or income.

You could also find a co-signer...

What’s the difference between a guarantor and a co-signer?

Co-signers have more rights and responsibilities than guarantors.

While a guarantor doesn’t have right to any assets (like a house), a co-signer jointly owns assets with the borrower. 

But a co-signer also has immediate responsibilities for repayments.

Whereas a guarantor only steps in if a borrower or renter has trouble paying, a co-signer pays a certain percentage from the start. 

To recap

A guarantor is someone who’s promised to pay another person’s debt if that person fails to make their repayments. This is different from a co-signer, who has immediate responsibility for payments.

There’s no set amount a guarantor has to earn. This differs between individual lenders and landlords. 

To become a guarantor, you normally need to be an adult living in the UK with a good credit score. Once you’ve legally agreed to act as a guarantor, you remain financially liable for the full length of time outlined in the contract.

Back to articles