A guide to buying with other people
Taking out a joint mortgage with your partner, family or friends could help you afford to take that first big step on to the property ladder. But it’s important that everyone understands the benefits, obligations and risks involved in buying a property together.
- What you should consider before you apply
- The different ways to buy together
- Working out your finances and costs
Your home may be repossessed if you do not keep up repayments on your mortgage.
Before you apply
When you set out to buy a home, it’s understandable that your mind is set on all the good things you’ve got to look forward to. But a mortgage is the most significant financial commitment you’re likely to make, so you need to think about the things that could change in your life, or in the life of the other mortgage holders, before you take on a joint mortgage.
You should also bear in mind that all of the mortgage holders will need to meet our lending criteria, even though we’ll only consider the income of 2 applicants. This means that we’ll look at everyone’s circumstances and finances, including their credit score, debts, commitments and regular spending. And you’ll all be jointly liable for the mortgage repayments – so if one of you can’t pay, the others will need to make up the full amount.
Property ownership options
When you buy a property with other people, you need to choose how it’s going to be owned – this is usually as joint tenants or as tenants in common. You can also enter into a joint mortgage with your parents where they act as guarantor – you’ll find more on this further down the page.
This option may be suitable if you’re married or in a long-term relationship with the person you’re buying with. It means you each:
- Have equal rights to the property
- Can claim an equal share in any profit made if the home is sold
- Will automatically inherit the property if the other person dies
Tenants in common
This option may be suitable for people who are teaming up with friends or family members to buy a home. It means you:
- Can each own a different share of the property
- Won’t automatically inherit the property if the other tenants die
- Can choose who to leave your share to in your will
If you choose to be tenants in common, you should consider asking your solicitor to set up a deed of trust.
Buying with your family as guarantor
Through our Family Affordability Plan you can apply for a joint mortgage with members of your family, which could enable you to afford a larger mortgage and access a wider range of mortgage deals. You’ll have full ownership of the property, and your family members won’t be liable for Stamp Duty.
Both you and your parents will be responsible for all mortgage repayments and charges, so you’ll all need to demonstrate that you can afford the repayments. Your parents will also need to show us that they’ve taken independent legal and tax advice, so they understand the risks involved.
If your circumstances change and you can afford the repayments on your own, you can remortgage and release your parents from the joint mortgage.
How to apply
Our mortgage calculator can help you work out how much you can afford to borrow. You can then complete an Agreement in Principle (AiP) to find out whether we’d be able to lend the amount you need – without affecting your credit score. If we can, the next step is to make an appointment with an adviser to apply for a mortgage.
More ways to buy your home
A way for families to help you get on or move up the property ladder – without spending their savings 2.
Help to Buy Equity Loan
By adding an equity loan to your 5% deposit you can apply for a smaller mortgage and choose from a wider range of deals.
Help to Buy Mortgage Guarantee
Get help buying your first or next home if you’re finding it hard to save the deposit you need.
Subject to status and availability. You must be 18 years old or over to apply for a mortgage.
1. Lines are open Monday to Friday, 8am to 9pm, Saturday 9am to 8pm and Sunday 10am to 4pm. To maintain a quality service, we may monitor or record phone calls. Call charges
2. Your family’s deposit may be forfeited if you don’t keep up repayments on your mortgage.