What is a joint mortgage and how does it work?

Key takeaways

• A joint mortgage is a home loan taken out by two or more people, with all borrowers jointly liable for the full monthly payment.
• You can typically borrow 4 to 4.5 times your combined salary or up to 5.5 or 6.5 times with enhanced borrowing schemes. See what you could afford today.
• Joint mortgages are generally easier to get than solo applications because lenders assess combined affordability
• You don't need to be married to get a joint mortgage, but unmarried couples should consider a Declaration of Trust
• Taking out a joint mortgage creates a financial association on your credit file that can affect both borrowers
• Ownership doesn't have to be 50/50; tenants in common allow flexible splits based on contributions

What is a joint mortgage?

A joint mortgage is a home loan taken out by two or more people. In most cases, two people apply together, but some lenders allow up to four borrowers on one mortgage. Co-borrowers can be family members, partners or friends, and everyone named on the mortgage is jointly liable for the full monthly payment.

Being named on the mortgage does not always mean being named on the property title deeds. In some cases, the borrowers will also jointly own the property, but some arrangements separate the mortgage from ownership. For example, with a Joint Borrower Sole Proprietor arrangement, known at Tembo as an Income Boost, a parent or another supporter can help on the mortgage without owning the property.

Read more:Can friends or siblings buy a house together?

How do joint mortgages work?

When you take out a joint mortgage with someone else, each person who is named on the mortgage is jointly liable for ensuring the repayments are made in full each month, which means if one person stops paying, the other will need to make the payment.

That legal responsibility applies even if you have a private agreement to split the costs differently between yourselves. Each person will typically also be a joint owner of the property, although there are exceptions, such as with a guarantor mortgage set up.

However, this doesn't always mean you'll have a 50% share in the property. The two main ownership types work like this:

• Joint tenant mortgage: All owners own an equal share of the property, even if they've contributed different amounts. This is a more common joint mortgage type used by couples.
• Tenants in common mortgage: Each co-owner's share is separate and reflects what each person has contributed to the deposit and repayments over the years. This can be a good option if buying with a friend, sibling or partner who has a different amount saved up, or earns a different salary.

You can read more about tenant mortgages in our guide here.

How many times can your joint salary be borrowed on a mortgage?

With a joint mortgage, you will typically be offered between 4 and 4.5 times your combined salary. Because the mortgage loan size is based on your combined salary, buying a house together could increase the mortgage amount you are offered.

For example, if you earn £30,000 a year, that means you could borrow £120,000. If you and your partner both earn £30,000 a year, together you could borrow £240,000, as this will be based on your combined income of £60,000.

You can also sometimes increase the mortgage you'll be offered if you qualify for enhanced borrowing schemes.

For example, if you're a first-time buyer and work in a professional field (think key workers like nurses, doctors and teachers, as well as professionals like lawyers and accountants), you could borrow up to 5.5 times your salary with a Professional Mortgage or Key Worker Mortgage. Or, if you earn over £37,000 or £50,000 collectively, you could qualify for a 5.5x Income Mortgage.

Beyond standard joint borrowing, there are over 20 affordability-boosting schemes which we advise on here at Tembo that could help you increase what you can borrow. In fact, our customers boost their budget by an average of £82,000 with our help. See your true buying budget in minutes.

Are joint mortgages easier to get?

Yes, joint mortgages are generally easier to get than a solo mortgage, as a lender will assess the combined mortgage affordability of both applicants rather than relying on one person's finances alone. 

One of the main factors that influences how much you can borrow for a mortgage is income. By combining incomes together, you may be able to borrow more, which can make getting the mortgage you need easier.

If you're combining your savings together, you'll also be able to put down a larger deposit, which could reduce the size of the mortgage you need. This will reduce your Loan To Value (LTV), which should allow you to access lower mortgage rates, which will make your monthly repayments more affordable.

Read more: How to get a bigger mortgage

You might also like: Can you use two Lifetime ISAs to buy a home?

Can you get a joint mortgage without being married?

Yes, you can get a joint mortgage without being married. Lenders typically assess a joint application in the same way for unmarried and married couples, or friends buying together.

The practical difference is legal rather than mortgage-related. Unmarried couples do not automatically have the same legal protections as married couples, so it is often sensible to put a cohabitation agreement or Declaration of Trust in place to record who owns what and what should happen if circumstances change.

It is also important to think about whether joint tenancy or tenants in common is the better fit, especially if each person is contributing different amounts.

Borrowers buying with someone other than a spouse may find this guide useful: Can friends or siblings buy a house together? 

What happens if one person dies on a joint mortgage?

If you have a joint tenant mortgage and one person named on the mortgage dies, the surviving co-owner will become solely responsible for the mortgage and the repayments. If the deceased person had life insurance, the insurance company may cover or help with the remaining mortgage balance.

With a tenants in common mortgage, if one of the co-owners dies, their share in the home forms part of their estate, along with any savings, investments and personal items. If they have a will, their share, along with the rest of their estate, will be distributed based on the wishes outlined within the will.

If they don't have a will, the estate will be distributed based on intestacy rules. These rules can be complex, but in short, they set out which family members would automatically inherit the estate if no will is in place, which is why having a will is so important, especially when you own property with others.

This could mean that the remaining owners have to accept someone as a co-owner whom they didn't originally agree to buy a property with. If the remaining owners wish to sell their home, they have the right to do so. The beneficiaries of the co-owner who passed away can’t initiate this process, even though they'll own a share of the property.

Read more: What is a mortgage deed?

What happens to a joint mortgage when you separate?

If you and your partner decide to separate and own a home together, to remove one party from the joint mortgage, you'll need to give them their share of the equity they hold in the property to buy them out.

If you have a joint tenancy mortgage, it's easy to work out the equity split. Simply divide the equity in the home by the number of co-owners.

If you have a tenants in common mortgage, you will each own a separate share. For example, one of you may own 40% of the equity in the home, the other 60%.

To work out the equity of the home, you'll need to:

1. Get the property valued by a surveyor. Bear in mind that an estate agent's valuation can sometimes be optimistic; a surveyor's independent valuation will give you a more accurate picture of the property's true market value.
2. Calculate the total equity by subtracting the remaining mortgage balance from the property value.
3. Work out each person's share of that equity, either equally or according to any specific agreement that already sets out how the equity should be split.
4. Complete a transfer of equity to buy out the other person by either using your savings, or borrowing money to cover the other person’s share. Once the transfer of equity is complete, their name is removed from the title deeds to the property, making the remaining borrower the sole owner of the home and solely responsible for the mortgage.

Read more: How to buy someone out of a property

Can a joint mortgage be transferred to one person?

Yes, you can transfer a joint mortgage to one person. Removing a name from a mortgage is a very similar process to remortgaging. Whether you're separating from a partner or your circumstances change, a specialist mortgage broker like Tembo can guide you through the process and find the best deal available to you as a sole borrower. To do this, you'll first need the permission of the other person on the mortgage to remove their name.

Next, you'll need to let your existing mortgage lender know that you would like to transfer the mortgage to one person. They will then run through a series of affordability checks to ensure you can afford the mortgage on your own.

What if only one person is earning on a joint mortgage?

It's quite common for joint borrowers to only declare one income on a mortgage application, particularly if someone is staying at home to look after a young family. The mortgage lender only assesses the income and outgoings that relate to the earner, but both borrowers are still credit checked. If the non-earning partner plans to return to work in the future, this can help support the mortgage application. Find out more here.

Does a joint mortgage affect your credit score?

Yes, a joint mortgage can affect the credit score of each applicant because taking one out creates a financial association between the co-borrowers on their credit files. This tells lenders that the applicants are financially linked, so one person's credit history can influence how the other's application is viewed.

It's worth knowing that agreeing to a joint mortgage means your finances are linked, so your co-borrower's credit history can have an impact on yours. Any negative entries on their credit history, including something as small as a missed phone bill, may also affect your credit rating and could decrease the amount you can borrow.

This financial association can sometimes remain on a credit file even after the mortgage ends, unless it is removed with the credit reference agencies.

If you want to check your history, CheckMyFile will show your credit history from the four main credit agencies trusted by mortgage lenders, including Experian, Equifax and TransUnion. So it's easy for you to spot any issues which could be affecting your credit score.Get your CheckMyFile report here.

Can I get a joint mortgage with a parent?

Yes, it is possible for you to get a joint mortgage with a parent. If you're in need of help affording a home, you can ask family or friends if they'll join you on the mortgage as a guarantor. One way of doing this is through an Income Boost, in which their income will be added to yours, which may increase the size of the mortgage you're eligible for.

Your relative isn't, however, named on the property title deeds, which makes you the sole owner. But they will be liable for the mortgage repayments, which means if you don’t make your monthly payments, they’ll be required to pay.

Another way your parents could help you get a mortgage is through a Deposit Boost. Your parent can help increase the size of your deposit through a small mortgage their own property to release equity and gift the proceeds to you. With a bigger deposit, you can increase your mortgage affordability. Your parents will just need to pass affordability checks for the mortgage on their property, and keep up with mortgage repayments for the loan.

With a family Springboard mortgage, first-time buyers can purchase a home without any deposit. Instead, parents (or a helpful friend) can deposit savings equal to 10% of the purchase price into a savings account with the mortgage lender. The savings are then held by the lender for between three and five years before being released.

However, if you don't keep up to date with your mortgage payments, your family or friends' savings are at risk. They may not get their savings back until you have caught up with your commitments and have shown that you are back on track. The lender may also use some of their savings to clear your arrears if necessary.

You might also like: Can a parent help with a mortgage?