Joint Mortgages: What You Need To Know Before Buying With Someone Else

A joint mortgage works the same as a standard mortgage, with one difference: more than one person is named on it, and all of them are legally responsible for the repayments.

If one person stops paying, the other is liable for the full amount. This is not a detail buried in the small print. It is the central fact of joint mortgage ownership.

The main advantage is borrowing power. Lenders typically use a multiple of combined income, which means two people on £30,000 each may be able to borrow significantly more than either could alone.

You do not have to be married or in a relationship. Couples, friends, siblings, and parent-child pairs all take out joint mortgages. Lenders accept up to four applicants on a single mortgage, though two is most common.

What if one of us has bad credit?

This is where joint mortgages get complicated. Lenders assess both credit files, and they apply the weaker profile to the application. A strong credit score does not cancel out a poor one. If one applicant has missed payments, defaults, or a County Court Judgement, the whole application is affected.

Depending on the circumstances, you may have three options: apply jointly and accept a higher rate or reduced borrowing, apply in one person’s name only and base the mortgage on a single income, or delay and work on improving the weaker credit profile before applying.

A broker can help you work out which makes most sense for your situation.

When two people buy together, they need to decide how they own the property legally. The two options are:
Joint tenants means you own the property equally as one unit.

If one of you dies, the other automatically inherits the full property.

Tenants in common means you each own a defined share, which can be split equally or in any proportion you agree. Each person can leave their share to whoever they choose in their will, and can sell their share independently.

This is often the better option for friends buying together or where one person contributes a significantly larger deposit.

You should discuss this with your solicitor before exchange. It has real consequences and is worth getting right.

If one person is contributing more to the deposit than the other, this should be documented. Your solicitor can draw up a deed of trust that records who has contributed what and what each person is entitled to if the property is sold.

Without one, the default assumption is equal ownership, which may not reflect the reality of who put money in.

This is uncomfortable to plan for, but worth thinking about before you buy. If you are not married, and one person wants to sell but the other does not, it can become a legal dispute.

A cohabitation agreement, drawn up by a solicitor before you buy, sets out what happens in various scenarios. It is not expensive, and it can save significant stress later.

The most important thing to know
A joint mortgage creates a financial link between you and the other person on it.

That link appears on both of your credit files and affects both of your financial futures until the mortgage is paid off or remortgaged into one name.
Go in with your eyes open.

Sources: MoneyHelper, Land Registry, FCA guidance. This article is for information only and does not constitute financial or legal advice. Speak to a solicitor about your ownership arrangements before exchange.