What is a joint mortgage?
A joint mortgage could be suitable for you if you want to buy a property jointly with at least one other person. Some lenders will allow up to four people to share a joint mortgage.
Each owner will be named on the property deeds and will be jointly responsible for making the mortgage repayments. It’s therefore vital that you trust the person (or people) you’re applying for a joint mortgage with.
- For expert advice on the best joint mortgage options for you, call Which? Mortgage Advisers on 0800 980 3892
- To understand the different forms of ownership available to you when you buy a property with someone else, check out the Which? guide to joint tenants and tenants in common
Benefits of joint mortgages
Joint mortgages typically come with similar rates and fees as standard mortgages.
However, you’ll usually be able to borrow more by sharing a joint mortgage than by applying for a mortgage on your own.
This is because lenders will consider the combined income of each applicant when making affordability checks.
You can also combine your savings to pay a larger deposit and this will often enable you to access better mortgage rates.
Drawbacks of joint mortgages
You will be financially associated with everyone you get a joint mortgage with, which could prove problematic if a co-owner falls into financial difficulty.
If a co-owner stops making their share of their mortgage repayments, you’ll still be liable for them. Your financial association with them will also affect your future credit applications.
You also need to consider what would happen if one of you wanted to move out/sell their share and the other didn’t – plus agree on how renovations, repairs, utility bills etc will be split between you.
Getting a joint mortgage with parents
Parents can often increase their children’s creditworthiness in the eyes of lenders by applying for a joint mortgage with them.
We’d only recommend this to parents who can comfortably afford this additional financial responsibility. You must also be willing to treat your children as equals when making decisions about the property.
If you already own a property, you’ll be subject to the additional stamp duty charge when buying the new property. You may also have a capital gains tax bill to pay when you sell.
Before deciding how to proceed it’s worth speaking to one of our expert mortgage advisers, who can recommend the best options for your personal circumstances. For a free consultation, call 0800 980 3892.