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A '''loan guarantee''', in finance, is a promise by one party (the [[guarantor]]) to assume the [[debt]] obligation of a borrower if that borrower [[default (finance)|defaults]]. A guarantee can be limited or unlimited, making the guarantor liable for only a portion or all of the debt.
Guarantor mortgages are popular with young borrowers who do not have a large deposit saved and need to borrow 100% of the property value to purchase a property. Generally, their parents will provide a guarantee to the lender to cover any shortfall in the event of default.
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