Comparison Guide · Updated July 2026
Family Deposit Mortgage vs Guarantor Mortgage 2026
A family deposit mortgage (sometimes called a springboard mortgage) uses a relative's savings as locked security, returned after a fixed period. A guarantor mortgage makes a relative legally liable for the mortgage debt if the buyer defaults, potentially without a cap on the amount. Both help buyers with a limited deposit onto the property ladder in 2026, but the risk profile for the helping family member is very different.
TL;DR
- Family deposit mortgage: Relative’s savings locked as security for 3–5 years, then returned; risk capped at the amount deposited
- Guarantor mortgage: Relative legally liable for the debt if buyer defaults; risk can extend beyond a fixed cap, potentially to their own home
Side-by-Side Comparison
| Feature | Family Deposit Mortgage | Guarantor Mortgage |
|---|---|---|
| How family support is given | Savings locked in a linked account (e.g. ~10% of price) | Legal liability for the mortgage debt |
| Risk to family member | Capped at amount deposited | Can extend beyond a fixed cap in some structures |
| Interest for family member | Often paid on the locked savings | None — no deposit is made |
| Duration of arrangement | Fixed period, commonly 3–5 years | Can run for the whole mortgage term or until released |
| Family member on property title? | No | No |
| Availability | Smaller number of specialist lenders | Modest number of established lenders |
How a Family Deposit Mortgage Works
Rather than gifting a lump sum outright, a family member deposits savings — commonly around 10% of the property's purchase price — into an account held by the lender as security. The buyer can then access a mortgage for the full or near-full property value. If mortgage payments are kept up throughout the agreed period (typically 3–5 years), the family member's savings are released back to them, often with interest earned in the meantime. If payments are missed, the lender can use the locked funds to cover the shortfall.
How a Guarantor Mortgage Works
A guarantor mortgage involves a family member formally agreeing to meet the mortgage payments if the buyer cannot. Depending on the specific product, the guarantor may also need to offer their own property or savings as additional security. This is a more open-ended commitment than a family deposit mortgage, since the guarantor's liability is not necessarily capped at a fixed sum, and can, in the worst case, put the guarantor's own home at risk if they had offered it as security and the buyer defaults.
Which Should a Family Choose?
A family deposit mortgage generally offers a clearer, time-limited and capped commitment, making it easier for the helping family member to understand exactly what they stand to lose in a worst case, and the prospect of getting the money back (with interest) at the end of the term. A guarantor mortgage may suit families who prefer not to lock away a lump sum, and are comfortable with the more open-ended nature of a guarantee, but this comes with a materially higher and less clearly bounded risk. Both parties should take independent legal advice before entering either arrangement.