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Joint mortgages
Buying a property with a friend, family member or partner often makes financial sense. But how does a joint mortgage work and how do you apply for one? Learn more in our guide below.
Apply for a joint mortgage with Mojo Mortgages
What is a joint mortgage?
A joint mortgage is when you and another person or people use the same mortgage to buy a property together. Sharing the responsibility of a mortgage with others can be a great way to make buying a home more affordable. Each applicant’s income can be considered, and the deposit requirement can be split between you.
When you apply for a mortgage jointly, lenders consider the circumstances of all applicant’s, and each needs to meet their criteria. All applicants are jointly responsible for the mortgage payments, whether you split them equally or not. This also means that if one borrower doesn’t pay, the other(s) become liable for the whole mortgage.
What does joint tenants and tenants in common mean?
You can take out a joint mortgage in one of two ways:
As joint tenants
When you apply for a joint mortgage as joint tenants - which is usually more suited to couples, each applicant:
Owns an equal share in the property and are entitled to an equal share of any profits from the sale of it
Automatically inherits the property if another applicant dies - so you’re unable to leave it in a will
Is equally responsible for the entire mortgage, so if anyone doesn’t pay their share, the other applicant(s) have to make up the difference
Is unable to sell their share of the property separately, or remortgage their share separately
As tenants in common
When you apply for a joint mortgage as tenants in common - which may be more suited to friends and business partners, each applicant:
Can own a different share of the property - helpful if someone contributes more to the deposit or repayments than others
Can sell their share of the property separately
Is equally responsible for the entire mortgage, so if anyone doesn’t pay their share, the other applicant(s) have to make up the difference
Won’t automatically inherit the other's share of the property if they die - so can leave your shares in your will
As being tenants in common is slightly riskier, especially if you’ll take on the lion’s share of the responsibility, it’s a good idea to ask a solicitor to draw up a deed of trust.
How do joint mortgages work?
A joint mortgage works in exactly the same way as any other mortgage, it’s only the property ownership and application that differ. Essentially you are still borrowing money from a mortgage lender and repaying it over a set number of years.
During the application, lenders will look at the eligibility and affordability of each applicant - so if one applicant has particularly bad credit, it could impact the application, even if other applicants have a strong credit file.
How lenders determine the size of your loan tends to vary between lenders, but usually they will use a multiple (usually 4.5 times) of two applicants’ combined income, or the highest earner’s income, plus the second applicant’s income.
If you’re planning to take out a joint mortgage with more than two applicants, most lenders will only use the combined income of the two highest earning applicants.
What are the benefits and drawbacks of a joint mortgage?
Could help you get onto the property ladder sooner
Allows you to combine income to potentially borrow more - making a more expensive property a possibility
Could enable you to save a deposit more quickly with more contributors
Lenders may see the mortgage application as more stable if there are multiple earners, due to greater ability to manage the repayments - especially if a higher earner could afford the repayments independently
Other mortgage costs, such as arrangement fees, legal fees and stamp duty can also be shared
It can be slightly more complex legally, especially for a tenants in common arrangement
If you have a joint tenancy, none of the owners will be able to leave their share of the property in their will
If you have a tenants in common set up, you can leave your share of the property in your will, but this could be problematic if other owners still want to live in and not sell the property once you pass away
With any type of joint mortgage, you’re responsible for the whole mortgage if other borrowers can’t or won’t pay - this means inherent trust in your fellow owners is essential
Who can take out a joint mortgage?
A joint mortgage is fairly flexible due to the different ways it can be set up, meaning it could be suitable for:
Partners in a relationship - whether married, cohabiting or in a civil partnership
Friends that want to live together
An older parent and their adult child(ren)
Siblings wanting to share a home
Parents helping their kids onto the property ladder ( a JBSP is most suitable)
Business partners who wish to invest in a buy-to-let property or portfolio together
“I speak to people from all over the country and buying with friends is far more common in areas like London, where people struggle to get on the property ladder as property prices are higher. I don't see this so much in areas like the North East, where property prices are much more affordable for borrowers.
Lenders often see buying with friends as riskier, so criteria doesn’t always allow for a successful outcome, but I have seen a slight increase in this type of request in recent years. It's not just friends either, probably around 5% of applicants I speak to are looking to buy with either friends or family members like siblings and cousins.”
Tanya Little, Mortgage Expert, Mojo Mortgages
Joint borrower sole proprietor (JBSP) mortgages
It’s perfectly possible to take out a standard joint mortgage with a parent or grandparent if you intend to live with them. However, if you’re lucky enough to have one that just wants to help you get onto the property ladder, a JBSP mortgage could be the way to go.
With this type of mortgage, you have a supporting applicant(s), usually but not always parents, who help you meet the affordability criteria for the mortgage you need. They are also jointly responsible for paying the mortgage, should you become unable to, but don’t hold any ownership of the property or appear on the deeds.
This can be a welcome alternative for many parents to a guarantor or family assisted mortgage. With a JBSP, supporting applicants don’t need to provide any form of collateral, they simply use their income to aid affordability of the loan.
How many people can be on a joint mortgage?
Most lenders will only accept two borrowers per joint mortgage, however, some are happy to consider three or four applicants. This is sometimes referred to as a multi-applicant mortgage.
Keep in mind that even if four applicants apply together, it’s highly likely that lenders will only consider the income of the two applicants with the highest income. So sharing a mortgage between more applicants won’t necessarily mean you can borrow more than with two.
Can a joint mortgage be paid by one person?
Yes, the joint mortgage payments could be made by one person. The lender doesn't really care which of you is paying, so long as the payments are made.
However, all applicants remain liable for the mortgage repayments, so if that one person decided to stop paying, it’s important that the remaining applicant(s) are able to afford to continue.
Can I transfer a joint mortgage to one person?
It’s possible for one person to take on a joint mortgage on their own, for example, if a couple separates. However, the person taking on responsibility for the mortgage would need to be able to meet the affordability criteria on their own and buy out the other applicants’ share(s) in the property.
However, where this is not possible, there are a few other options for those looking to leave a joint mortgage:
Options for leaving a joint mortgage
Sell your home – you can sell the home, pay off the mortgage and split any profits (or debt if you're in negative equity)
Retain a stake in the property – one of you could transfer most of the ownership to the other, but still retain a small stake in it. They would therefore be entitled to money if the property was sold
Pay off the mortgage – if you're close to paying off the mortgage, it may be worth continuing until it's paid off. You can then sell the home and split the proceeds
Get a guarantor – If you’re struggling to prove that you could afford the full mortgage payments on your own, you may be able to transfer to a guarantor mortgage
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Joint mortgage FAQs
Can you get a joint buy-to-let mortgage?
Yes, you can get a joint buy-to-let mortgage. Often partners, family members or business partners purchase an investment property together.
Can I change a joint tenancy into a tenancy in common?
Yes, you can. It's known as a severance of joint tenancy. You can apply to do this with or without the other owner's permission. A solicitor can also help with the application.
Learn more about the process on the gov.uk website.
Can we remortgage a joint mortgage?
Yes, you can remortgage a joint mortgage. However, all borrowers will need to agree on the decision to switch to a new deal.
If you own the property on a joint tenancy agreement, you must remortgage the whole value of the property at the same time.
How do we sell our house with a joint mortgage?
If both owners want to sell the property, then you would go about selling it as you would normally. Any profit would be split accordingly between the owners.
If one owner does not wish to sell, then it's usually best for them to buy the other share of the property and take full responsibility for the mortgage.
