Joint borrower sole proprietor mortgage

What is a Joint Borrower Sole Proprietor (JBSP) mortgage?

Sometimes referred to as a JBSP mortgage, a joint-borrower-sole-proprietor mortgage allows two or more people to buy a property together but only one person owns the property and is named on the title deeds.

It’s commonly used by parents or family members helping someone buy a home, as it allows lenders to assess all borrowers’ incomes without the extra parties needing to own the property or provide a guarantor or deposit.

Unlike guarantor mortgages, all borrowers are jointly responsible for repayments, which can improve affordability and access to competitive mortgage rates.

How does a JBSP mortgage work?

In some ways, a joint-borrower-sole-proprietor mortgage is similar to a standard mortgage, except:

• Up to four people can be named on the mortgage

• Only one person (the proprietor) owns and usually lives in the property

• All borrowers are legally responsible for the full mortgage repayments

• Non-owners are not named on the deeds and have no claim on the property or its value

Because everyone shares liability, missed payments can affect all borrowers’ credit records. For this reason, joint borrower sole proprietor mortgages should only be taken out with people you trust.

Once the fixed or initial deal ends, the sole owner may be able to remortgage in their own name, removing the other borrowers.

Who can benefit from a JBSP mortgage?

A Joint Borrower Sole Proprietor mortgage can benefit people who want to buy a home but need extra income to pass affordability checks, without giving others ownership of the property.

It’s most commonly used by first-time buyers whose income alone isn’t enough to borrow the amount they need. Parents or close family members can join the mortgage to boost affordability, while the buyer remains the sole proprietor.

A JBSP mortgage may also suit:

• Buyers with lower or variable incomes who need additional financial support

• Parents helping children onto the property ladder without owning the home

• Families wanting to avoid higher Stamp Duty charges linked to joint ownership

• Buyers planning to remortgage in their own name once their income increases

Because all borrowers are jointly responsible for repayments, a JBSP mortgage works best when everyone involved understands the risks and trusts each other.

What’s the difference between a JBSP mortgage and a joint mortgage?

The main difference between a Joint Borrower Sole Proprietor (JBSP) mortgage and a joint mortgage is who owns the property.

With a JBSP mortgage, not everyone named on the mortgage is a property owner. With a joint mortgage, all borrowers jointly own the home.

What else do you need to consider before taking out a JBSP mortgage?

There are a number of steps you should take before applying for a joint-borrower-sole-proprietor mortgage. 

1. Take legal advice

Taking on a mortgage debt without any rights to the property should not be taken lightly. It’s a good idea for all parties to take legal advice – some lenders will insist on this before offering a deal. 

2. Plan for the future

The borrowers should agree on how and when non-proprietors will exit the mortgage and what will happen if one party can’t keep up with payments.

3. Take out insurance

Mortgage payment protection or income protection insurance can ensure that repayments are made if, for example, one person loses their job and can’t pay their bills. 

4. Plan how to switch mortgages in the future

It’s a good idea to plan how you will move mortgage debt at the end of each term. This could lower the monthly repayments if a better rate is found or if the property increases in value and qualifies for a lower loan-to-value ratio. 

5. Consider other types of mortgages

A JBSP mortgage is one way of helping family members buy a home, but a guarantor mortgage or a housing scheme could be more appropriate for your circumstances. Take the time to research all the options.