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Savings as Security

Help your loved ones get on the ladder through cash savings.

Savings as Security

Help your loved ones buy by temporarily placing a deposit in an account with their lender.

If you have cash savings, you could help your loved ones buy a home of their own sooner through a Savings as Security mortgage. Your savings will be used in lieu of a house deposit, so they could get a mortgage even with no money put aside.

The team at Saga Mortgages, provided by Tembo, can walk you through setting up a Savings as Security mortgage, and help you work out if it’s the right option for you and your family. 

How does it work?

A Savings as Security mortgage, also known as a family guarantor or springboard mortgage, is a scheme that allows family members to help the next generation buy a home without having any deposit saved up. 

It works by a guarantor depositing 10% of the property’s total value into a designated savings account, which is then used in lieu of your loved one supplying a down payment. The savings are held by the lender as security for the mortgage for a set period of time, normally 5 years. At the end of the fixed period, you will get your savings back plus any accrued interest, as long as your loved one has made their repayments each month.

These types of mortgage differ depending on the lender you go with. For example, some lenders require you to have your residential mortgage with them before you can help your loved one.

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Knowing your mortgage options

Saga Mortgages can help you understand and navigate your mortgage options.

Finding out which products are available starts with knowing which ones you're eligible for and we can help with that.

Am I eligible?

Benefits

  • Help your loved ones buy sooner. On average it takes almost 10 years to save up for a house deposit. Through a Savings as Security mortgage, you can help your loved ones buy a home of their own sooner, instead of waiting to save up the money themselves. 
  • Your support is temporary. Your savings are held by the lender for a set time period, normally 5 years. At the end of this period, as long as your loved one has made each of their monthly repayments and can afford the mortgage by themselves, you will get your savings back plus any accrued interest. This means that if you need that money for anything else in the future, perhaps care costs or retirement savings, you know you’ll get it back. 
  • You could support multiple buyers. As long as you have sufficient savings to do so, you can choose to be a guarantor to multiple buyers. So if you have children or grandchildren who you want to help, you could support them all at the same time.
  • Your savings could increase. Over the course of the 5 year product term, your savings will accumulate interest. As long as each of the monthly mortgage repayments are made by the borrower, you could get back more than you originally put in.

Risks and considerations

  • Your savings are at risk. As a guarantor on a Savings as Security mortgage, you are offering your savings as security against the mortgage. This means that if the borrower doesn’t keep up with their mortgage payments, you might not get your savings back. The buyer’s home also may be repossessed.
  • You cannot access your savings. During the 5 year product term, you will not be able to access your savings. So if you may need the money in the short-term, a Savings as Security mortgage may not be the right choice for you.
  • Becoming a guarantor could affect your affordability. If you want to take on another debt, acting as a guarantor could have an impact on your ability to be approved for another loan. Being a guarantor is a financial responsibility and the lender may take this into account when assessing your affordability for a new loan.
  • The mortgage options are limited. Savings as Security mortgages are uncommon amongst lenders. This means there are fewer options to choose from, and your loved one might pay a higher interest rate than if they took out a standard mortgage.
  • The buyer may fall into negative equity. Because the homeowner may have no or very little equity in the property, this puts them at greater risk of ending up in negative equity if house prices go down. Negative equity is when a property’s value is less than the value of the mortgage.
  • Your credit score could be impacted. As you and the buyer are financially linked, if they default on their mortgage, or experience other credit problems, that will impact your own creditworthiness. 

Here and ready when you are

Whether you have questions about Savings as Security mortgages or just want to find out more, the expert team are on hand to help.

0330 018 3071

Mon-Thu 9am-8pm
Fri 9am 5:30pm
Sat-Sun 10am-3pm

Am I eligible?

Frequently asked questions

Here are some of our most frequently asked questions
Who is eligible for a Savings as Security mortgage?

In order to be eligible for a Savings as Security mortgage, you and your loved one will need to pass an affordability assessment and credit check conducted by the lender.

You will also need to have 10% of the value of the property your loved one wants to buy in cash savings. You often need to have a current account with the lender you choose to go with, too.

You do not need to be a blood relative to help someone through a Savings as Security mortgage, although it is normally used by those who are wanting to help their child or grandchild get on the ladder.

Who applies for a Savings as Security mortgage?

The buyer applies for the mortgage, as opposed to their guarantor. So if you are hoping to help a loved one like your child or grandchild through a Savings as Security mortgage, they need to submit the application.

Are there other ways I could support my loved one’s purchase?

Yes, there are various ways you can support your loved one’s home purchase. For example, you could use a Deposit Boost to unlock money from your property and gift the proceeds to your loved one as part of their house deposit, or even downsize to access cash help in your current home.

You could also direct them to an expert in mortgage affordability like the team at Saga Mortgages, who can help them discover ways they can boost their buying budget, with or without family support.

If financial support isn’t an option and you have the space, you could allow them to move into your home and pay a small amount of rent, enabling them to save up a house deposit of their own sooner.

Do I need to get legal advice beforehand?

Before agreeing to help someone through a Savings as Security mortgage, you need to get independent legal advice. This is to ensure this is the right decision for you, and that you understand the full implications of helping someone through this type of mortgage product.

What happens if the guarantor dies?

If you are the sole person named on the savings account used for the Savings as Security mortgage, in the event of you passing away the lender will repay the savings and any accrued interest at the end of the product term to your representatives. To do this, the lender will need legal documents to confirm the death and to confirm who your representatives are.

If some or all of the savings have been used by the lender to cover the mortgage costs because the buyer hasn’t kept up with their repayments, this will reduce the amount that could be returned to your representatives.

If someone else is named on the savings account, for example your partner, then it will continue to be held in their name.

Why choose Saga Mortgages?

Saga Mortgages is a service created to better support those over 50 looking to take out a mortgage. You’ll benefit from Tembo's award-winning advice from their friendly, experienced team of mortgage professionals, who are available seven days a week. They’ll search all the available options to find the best solution for you and your family.

When it comes to Savings as Security and family support mortgages, Saga Mortgages has particular expertise. The service is provided by Tembo, a digital mortgage broker who specialise in boosting affordability using guarantor mortgages, and other specialist schemes.

To understand how a Savings as Security mortgage could work for you and your family, create a Saga Mortgages recommendation. This shows you indicative monthly repayments, live interest rates and product explainers for this and other guarantor schemes. Complete our short fact find to begin. 

Will I be able to talk to an advisor?

The Saga Mortgage service enables you to book an appointment with Tembo's award-winning mortgage advisors. Simply complete our online fact find and, if you’re eligible, you’ll be directed to book an appointment.

The team is available 7 days a week, ready to answer any questions you may have.

What lenders will you get access to?

With Saga Mortgages, you will have access to mortgage advice through our partner Tembo. Their award-winning mortgage advisors will search over 20,000 mortgage products and over 100 lenders to find the most suitable and best priced deal for you.

This includes all the high-street lenders you’ll be familiar with, like Nationwide, Halifax, Lloyds, Barclays and HSBC, as well as smaller, specialist lenders like Livemore and Generation Home.

Is Saga Mortgages FCA regulated to give mortgage advice?

All mortgage advice through Saga Mortgages is provided by Tembo Money Limited, who are regulated by the Financial Conduct Authority (FCA) under the registration number 952652. Their team of award-winning mortgage advisors are experienced in providing mortgage advice, including guidance on remortgaging, family supported mortgages and later life lending.

Important information

Saga is a registered trading name of Saga Personal Finance Limited, which is registered in England and Wales (company number 3023493). Registered office 3 Pancras Square, London, N1C 4AG. Saga Personal Finance Limited is authorised and regulated by the Financial Conduct Authority under the registration number 178922. Tembo Money Limited (12631312) is a company registered in England and Wales with its registered office at 18 Crucifix Lane, London, SE1 3JW. Tembo is authorised and regulated by the Financial Conduct Authority under the registration number 952652. Tembo Money was awarded Best Mortgage Broker at the British Banking Awards in 2022 and 2023.