A joint mortgage is often associated with two borrowers, typically a married couple or partners living together. However, many lenders also accept mortgage applications from more than two people.
This guide explains how multiple-applicant mortgages work, which lenders offer them, and how to find the best deal for your circumstances.
How many people can be on a mortgage?
Many lenders accept up to four people on a single mortgage application, commonly known as a multi-applicant mortgage. However, accepting four applicants does not necessarily mean that all four incomes will count towards the amount you can borrow.
Typically, all four borrowers share responsibility for repaying the mortgage, while the lender calculates affordability using only two incomes, usually those of the highest earners. Every applicant must still meet the lender’s eligibility criteria.
Some lenders take a more flexible approach and include income from three or four applicants. Examples are outlined below.
Three-person mortgages
The following lenders accept up to four applicants but can include income from three:
- Mansfield Building Society
- Scottish Building Society – Accepts income from up to three applicants at a maximum of 80% LTV. Above this level, only two applicants’ incomes can be included.
- Teachers Building Society – Takes the full income of two applicants into account, alongside 50% of a third applicant’s income.
Four-person mortgages
Several lenders, including some high street banks, accept mortgage applications from up to four people. Halifax and TSB, for example, allow four applicants in certain circumstances, although they calculate borrowing using only two applicants’ incomes.
Fewer lenders include income from all four borrowers. Examples include:
- Bath Building Society
- Tipton & Coseley Building Society
- Gen H – Accepts up to six applicants, with income from a maximum of four included in the affordability assessment.
How multiple-applicant mortgages work
A multiple-applicant mortgage can make purchasing a property more affordable. Where a lender includes several applicants’ incomes in its calculations, this may increase the amount you can borrow. Splitting the mortgage repayments between more people can also lower each person’s contribution.
Every applicant must meet the lender’s criteria, including those who have no income or whose earnings are excluded from the affordability assessment.
As with other joint mortgages, buyers can own the property as joint tenants or tenants in common. Joint tenants have equal rights to the whole property, while tenants in common can hold equal or unequal shares. These ownership arrangements do not change the borrowers’ responsibility for the mortgage: each remains liable for the full outstanding debt if the others fail to pay.
Tenants in common may suit business partners making a commercial property purchase, as it allows their ownership shares to reflect their respective investments. An owner may be able to sell their share, subject to the mortgage terms and any ownership agreement. Their share can also pass under their will or the intestacy rules when they die, rather than automatically transferring to the surviving owners as it would with a joint tenancy.
Who can go on one together?
Multiple-applicant mortgages can support residential and commercial property purchases, with applications involving relatives, friends or business partners.
Common arrangements include:
- A couple applying with a parent or grandparent to help meet the lender’s affordability requirements
- Friends, cousins or siblings purchasing a home to live in together
- Business partners jointly investing in a buy-to-let property
- Parents purchasing a property with their adult children
How much could you borrow as a group?
Lenders differ in both the number of applicants’ incomes they accept and the loan-to-income (LTI) multiples they use to calculate borrowing.
Some apply a single multiple to the combined eligible incomes, typically around 4.5 times income, although higher multiples may be available depending on the applicants’ circumstances. Others apply a multiple to the two highest earners’ combined income, then add the accepted income from additional applicants. Some lenders may offer a lower multiple where more applicants are involved.
Choosing a lender whose criteria suit your circumstances could help you maximise your borrowing potential. At Money Helpdesk, our experienced brokers regularly arrange multiple-applicant mortgages and can help you understand your options.
Advantages and disadvantages
As with all financial products, there are both advantages and disadvantages to taking out a mortgage with multiple applicants:
|
Benefit |
Drawback |
|
Enables you to get onto the property ladder more quickly |
More complex lending conditions, not all lenders support |
|
Helps you buy a more expensive property more easily |
There can be more legal complexity the more owners that share one property, especially if using tenants in common set up |
|
Costs such as deposit, arrangement fees, legal fees and stamp duty can be shared |
Each individual applicant becomes responsible for others’ share of the mortgage repayments if some applicants don’t pay |
|
Can reduce the risk to lenders if they know 4 incomes are supporting a mortgage, vs. two incomes, for example |
The individual profits from selling a property become smaller, the more owners that share it |
Alternatives to consider
If you need help meeting affordability requirements but would prefer to purchase without sharing ownership with several people, there are alternatives. These may be particularly useful for first-time buyers.
Joint borrower sole proprietor (JBSP) mortgages
A JBSP mortgage allows relatives, often parents, to join the mortgage application so their income can support the lender’s affordability assessment. All borrowers share responsibility for repaying the mortgage, meaning the supporting applicants must cover payments if the purchasing borrower cannot.
Only the applicant or applicants purchasing the property are named on the title deeds. Supporting borrowers take on responsibility for the mortgage without gaining an ownership share, so this arrangement requires trust and a clear understanding of everyone’s obligations.
Guarantor mortgages
A guarantor mortgage offers another way for someone to support a property purchase without becoming a joint owner.
Depending on the lender’s requirements, the guarantor may provide savings or equity in their own home as security. This can help buyers with a small deposit or limited income, although eligibility varies between products.
The guarantor takes on a financial commitment: their savings or home could be at risk if the borrower fails to meet the mortgage terms. The level of risk depends on the guarantee and the security provided.
Frequently Asked Questions
This depends on the mortgage terms and how ownership is arranged. Holding the property as tenants in common may allow ownership shares to be transferred, but removing a borrower still requires the lender’s approval.
Anyone taking over the mortgage alone must meet the lender’s affordability criteria using their own income. This could be challenging if the original borrowing relied on several applicants’ earnings.