Best joint mortgage deals

What is a joint mortgage?

A joint mortgage is a mortgage that is shared with another person (or people). Most people take out a joint mortgage with a partner, but you can also take one out with your parents or pool your resources and take out a joint mortgage with friends. Some lenders allow up to four people to buy together.

It can be a great way to get onto the property ladder so if you’re not able to buy on your own, a first-time buyer joint mortgage could be one realistic way of taking your first steps towards home ownership. It could also be a good option if you want to buy a larger property or are hoping to move to a more expensive area.

However, it’s a serious commitment that you should take the time to thoroughly think through before signing on the dotted line. Each person named on the mortgage is jointly liable for the debt, so if one person can’t keep up with their payments, the others will need to make up the shortfall.

A mortgage is a long-term commitment and there’s the real possibility that one of you might want to move out early or sell their share, so you should also think about these points before applying for a joint mortgage. It’s important to seek professional legal advice on the options available to you when it comes to property ownership, so you know exactly where you stand if things change in the future.

Why choose a joint mortgage?

There are lots of reasons why a joint mortgage could be a good choice:

• You can often borrow more by combining incomes
• It can help you get on the property ladder sooner
• Costs like the deposit, legal fees and monthly payments can be shared
• You don’t have to be married or in a relationship to get a joint mortgage. Friends, siblings, or even parents and children can apply together.

Just remember, it’s important to trust the people you’re buying with, because you’re all equally responsible for the mortgage.

Types of joint ownership of property

When you make your joint mortgage application, your solicitor will ask what type of joint mortgage you want and whether you’re applying as joint tenants or tenants in common. When you’re joint tenants, you have joint ownership of the property - that is, each of you has equal rights to the whole property, and if the property is sold, any profits are split between each of you equally. Tenants in common refers to a type of mortgage where each party owns a specific share of the property, drawn up in the ‘deed of trust’ by your solicitor that clearly states how much of the property each person owns.

Joint tenants

This is most common for those applying for a joint mortgage with a partner as it means that, in the event of the death of one of the owners, the property will automatically pass onto the other owner. This is the case even if someone states in their will that they wish their share of the property to be passed to someone other than the person they own it with.

Tenants in common

This type is more common for those looking to apply for a joint mortgage with parents or a joint mortgage with friends. It means that one person may own 30% of the property and the other person has 70%, or two people might own 40% each and the third owner may have a 20% share of the property. With this type of joint ownership, the share can be passed on to a named beneficiary in the event of death.

Who can get a joint mortgage?

When you apply for a joint mortgage, lenders will look at the credit score of all applicants. This can be beneficial if one of you has a lower credit score but the other person has a high one - but it could also adversely affect your application if one of your party has a particularly low credit score.

If you’re applying for a joint mortgage with retired parents, the criteria may be stricter than if your parents were in full-time employment, as they’ll need to be able to prove that they can meet the monthly payments. Rules vary between lenders, but some impose maximum age caps on joint mortgages.

Many lenders also offer joint Buy to Let mortgages. Again, the eligibility criteria vary from lender to lender but in general, the rule should be the same for a Buy to Let joint mortgage as for an individual Buy to Let loan. L&C can help you to navigate the different options and find the solution that works best for your circumstances.

How to find the best joint mortgage deals

There are lots of joint mortgage deals out there, so it’s worth comparing what’s available.

You can use our online Mortgage Finder to check the latest joint mortgage rates from across the market.

We work with over 90 lenders and can help you find the right deal based on your situation, whether you’re buying with a partner, a friend or a family member.

Our expert advisers can guide you through the whole process and explain everything clearly, including how to set up the right ownership structure for you.

Making repayments on a joint mortgage

When you have a joint mortgage, all borrowers are equally responsible for making the monthly payments.

It doesn’t matter what you agreed between yourselves – if one person can’t or won’t pay, the others have to cover it.

Because of this, it’s a good idea to have an open conversation about finances before taking out a joint mortgage. You might also want to draw up a legal agreement (often called a Deed of Trust) to record who is putting in what, and what happens if the property is sold.