What is a joint mortgage?
You can buy a property with one or more other people by getting a mortgage in the names of both or all of you.
Everyone named on the mortgage will be responsible for making repayments. You can decide between you how you share the equity in the property. This is the percentage of it that you own, which increases as you pay off more of the mortgage.
Who can get a joint mortgage?
Joint mortgages are usually taken out by couples. They are available to married couples, unmarried couples and civil partners.
However, you could also buy a home with:
One or more friends or family members you intend to live with
A friend or family member who wants to help you afford a property or buy part of one as an investment
A business partner who wants to invest in property with you
Most joint mortgages are taken out by two people, but some lenders will allow up to four people to buy together. This guide explains the benefits and risks of buying a house with friends or family.
How much can you borrow with a joint mortgage?
You can usually borrow more if you buy with someone else because your combined income will be higher than your income alone.
If both of you have a regular income, you will be able to afford a more expensive property than you could on your own.
Lenders used to multiply your income by a set amount to decide how much they would lend you. For example, they might have offered three times your combined income. If you earned £30,000 and your partner earned £20,000 a year, they would lend you up to £150,000.
However, they now base it on a more advanced calculation that takes into account your income, your credit record and what you spend each month on bills and other expenses.
This guide explains how lenders work out how much you can borrow.
Some lenders will consider your total income when they calculate how much they are willing to lend you, but others will only look at the incomes of two borrowers, even if there are three or four of you buying together.
They will still check the credit records and finances of everyone who will be named on the mortgage. This guide explains what lenders check and how to work out if you can afford a mortgage.
How much do joint mortgages cost?
They come with the same costs as standard mortgages, including interest and mortgage fees.
However, if you can save a higher deposit between you, this should give you a better choice of mortgages, so you could choose one with a lower interest rate than if you bought a property alone.
How to get a joint mortgage
The process of making a joint mortgage application is the same as applying on your own. However, you and the person you are buying with will need to do the following together:
Fill in and signing application forms
Meet mortgage advisers or solicitors
How does joint ownership work?
Everyone named on a joint mortgage is equally responsible for making sure the full repayment due is made to the lender each month.
You may decide to split the payments 50/50, but if the other borrower stopped paying their half, the lender could pursue you for the missing money.
If you want to make any changes to your mortgage like borrowing more or changing it to a new fixed rate deal, this will have to be authorised by all of the borrowers.
There are two ways you can each own your property with a joint mortgage:
Take out a mortgage as joint tenants if you want all of the borrowers to legally be seen a single owner and to have equal rights in the property. Owning the property equally as joint tenants is usually used by long term couples.
If one borrower died, the other borrowers would inherit their share of the property*
If you sold the property, any profits would be split among you all equally
If you remortgage the property, you will need to get a new mortgage together, not separately
Tenants in common
Taking out a mortgage as tenants in common lets you all own legally separate shares in the property. This is usually used when friends, family members or business partners buy a property together.
The shares you each own can be for whatever percentage you choose and do not have to be split evenly
You can sell your share in the property separately
You can leave your share of the property to someone else in your will
For example, if you bought a property worth £150,000 with one other person and you owned 60% of it, your share would be worth £90,000 once the mortgage has been paid off.
A solicitor can draw up a deed of trust, which is a legal document that specifies the percentage of the property you each own.
Joint mortgages will affect your credit report
If you apply to borrow money in the future, lenders will run a credit check when they decide whether to accept you. The following could show on your credit record if you have a joint mortgage:
A financial association with the person you buy with. This person will be linked to you on your credit record, so if they have bad credit it could affect what lenders think of your ability to meet repayments.
Borrowing money shows on your credit report, and the amount of debt you have will influence whether lenders think you can afford to borrow more.
Missed or late payments show up too and are likely to put off potential lenders.
Can a joint mortgage be split?
Yes, you can get out of a joint mortgage, but it can be complicated in some circumstances. You can either sell the property and share the money you get from it, or one person could buy the other's share in the property.
If you need to get out of a mortgage because of a relationship breakdown, read our guide to your mortgage options.
Tenants in common
If you own property as tenants in common, selling one owner's share to another is possible. If the buyer cannot afford to buy it outright, they will need a mortgage to cover it or to extend their own mortgage. They will only be able to do this if their mortgage company believes they can afford the new higher repayments.
If you are joint tenants, you need the agreement of everyone on the mortgage before you can sell the property.
Alternatively, you could change your mortgage arrangement so you are tenants in common, as explained in this Citizens Advice guide to ending a joint mortgage. One homeowner could then sell their share in the property to the other.