TMW launches guarantor mortgages

8 March 2010 | By Natalie Thomas

Products include several “limited liability” deals for those who want to guarantee a smaller proportion of the mortgage and full liability products for guarantors who are able to provide support for the whole mortgage.

With the limited liability products, the applicant must be able to afford at least 70% of the loan amount when applying.

The guarantor must be able to afford the shortfall - a maximum of 30% of the debt - plus a further 10% “tolerance”.

Deals available with the limited liability feature include a two-year fixed rate deal at 3.99% with a 2% arrangement fee up to 75% LTV, and a three-year fixed rate deal at 5.99% with no arrangement fee, £1,000 cashback and a maximum 75% LTV.

There is also a two-year fixed rate deal at 6.24% with an £895 arrangement fee at up to 85% LTV and a two-year tracker at 2.99% with a 2% arrangement fee at up to 75% LTV.

TMW says the range would be suitable for graduates who are likely to see their income increase over time, allowing the guarantor to be removed from the mortgage at a later date. 

For the full liability products, guarantors need to be able to afford the entire mortgage as well as keeping up with existing commitments such as their own mortgage.

Products include a two-year fixed rate at 4.99% with a 1% arrangement fee at up to 80% LTV and a two-year fixed rate at 5.59% with a 1% fee at up to 85% LTV.

There are no occupational restrictions, which mean the products will suit parents wishing to help their student children purchase a home.

Tracie Pearce, head of products at TMW, says: “The new range of guarantor mortgages offer choice and flexibility for guarantors and first-time buyers.

“Many lenders have guarantor propositions but few offer products specifically designed to cater for this sector. 

“TMW is delighted to support the housing market, helping first-time buyers get a foot on the housing ladder.”

The guarantor range from Nationwide has been launched following the recent withdrawal of guarantor deals from Halifax and Cheltenham & Gloucester, both part of Lloyds Banking Group.

Lloyds said at the time that it decided to withdraw its guarantor range because there was no demand for the product.

It still offers its Lend a Hand scheme, where borrowers need to have a 5% deposit plus the backing of someone else with savings of 20% of the property’s value, but this product is only available direct.

Northern Rock still offers a range of mortgages that offer the guarantor facility.