Guarantors for Mortgages 2026 – When is it Needed and What are the Risks

Not every mortgage application requires a guarantor, but when the bank does ask — it is important to understand exactly why, and what the real implications are for someone who agrees to sign as a guarantor. Here is the complete guide for 2026, both for borrowers and for those who are asked to guarantee.

A guarantor for a mortgage is a third person who commits to the bank to pay the remaining loan amount if the primary borrower fails to make payments. This is a full legal commitment, not just a "recommendation" or "moral approval."

When does the bank require a guarantor?

Unstable income: New self-employed individuals, or those whose income does not clearly meet the required repayment ratio.
Borrower's age: Very elderly borrowers, where the loan period exceeds the expected retirement age.
High LTV ratio: When the equity is relatively low, increasing the risk to the bank.
Problematic credit history: Previous delinquencies or low credit rating.

What exactly is the risk for a guarantor?

A guarantor signs a full personal commitment — if the borrower stops paying, the bank can turn directly to the guarantor and demand the full balance, not just part of it. The guarantee is also recorded in the guarantor's credit report, and may limit their ability to obtain credit or a mortgage of their own in the future — even if the original borrower is paying on time.

Limited guarantee vs. full guarantee

There are different types of guarantees: full guarantee (liability for the entire amount), and limited guarantee in amount or time. It is important to check exactly what type of guarantee you are being asked to sign, and not to assume it is just a "formality" — you should read the guarantee documents carefully and consider independent legal advice before signing.

Alternatives to personal guarantees

If it is difficult to find a willing guarantor, there are alternatives: mortgage insurance (the insurer covers part of the risk for a premium), increasing equity to reduce the LTV, or improving the credit profile before submitting the application. Some banks also offer a "bank guarantee" from a financial institution instead of a private guarantor, in exchange for a fee.

What happens to the guarantor if the borrower sells the apartment?

In most cases, the guarantee ends when the loan is fully repaid (including in the case of selling the apartment and closing the mortgage from the proceeds) — but it is important to ensure this explicitly in the guarantee agreement, and not to assume that the guarantee "automatically disappears" once the borrower sells the property.

A common mistake to avoid

A common mistake is to sign as a guarantor "as a family favor" without reading the full legal commitment, and without checking the actual financial situation of the borrower. A guarantee is a personal commitment in every sense — it is advisable to treat it with the same seriousness as taking a loan yourself.

Frequently Asked Questions

Does a guarantee affect the guarantor's ability to take their own mortgage?
Yes — the bank may consider the guarantee as an existing commitment when checking the guarantor's repayment ratio for a future application.

Can a guarantee be canceled after signing?
Usually not unilaterally — the bank's consent is required, and sometimes a replacement with another guarantor or additional collateral.

What happens if there are several guarantors on the same mortgage?
Each guarantor may be fully responsible ("joint and several liability"), meaning the bank can demand the full amount from any one of them individually, not just a proportional part.

What happens if the guarantor themselves wants to take a mortgage in the future?
The existing guarantee will be taken into account when checking their repayment ability — it is advisable for the guarantor to plan this in advance and not be surprised when the time comes to request their own loan.

Is there a way to reduce the risk as a guarantor without refusing entirely?
You can try to negotiate a limited guarantee in amount or time, instead of a full guarantee without limitation — the bank may not always agree, but it is worth checking.

Considering purchasing an apartment or choosing a mortgage mix?

Check out properties for sale in Ma'ale Adumim and in Jerusalem, and contact the Merkaz HaNekasim team for personal advice.