Mortgage Advisor & Director
Mortgage Advisor & Director
Although most people think of a joint mortgage as one shared between two applicants, usually a married or cohabiting couple, did you know that many lenders allow for more than two people to be on the same mortgage?
Here we look at multiple-applicant mortgages, how they work, which lenders accept multiple applicants, and how to find the best deal.
How many people can be on a mortgage?
Many lenders today allow for four applicants on one mortgage application, often referred to as a multi-applicant mortgage. However, the vast majority won’t consider the income of all four.
In most cases, four people can share the responsibility of repaying a mortgage, but the loan will be based on the combined income of just two of them - usually the highest earners. However, keep in mind that all four applicants still need to meet the lenders’ criteria in this scenario.
That being said, there are a handful of multiple-applicant lenders who are willing to consider the income of three or even all four of their incomes. We look at some examples below:
Three-person mortgages
Some of the lenders who allow a maximum of four applicants, but consider the income of three of them are:
- Mansfield Building Society
- Scottish Building Society - accept up to three applicants’ income at a maximum of 80% LTV, above 80% LTV, they only accept a maximum of two applicants’ income
- Teachers Building Society - Consider the full income of a maximum of two applicants’ income and 50% of the third applicant’s income
Four-person mortgages
Quite a large number of lenders, even some high street lenders, now allow up to four mortgage applicants. Halifax and TSB, for example, allow four applicants in some circumstances, however, they both only accept the income of two of those applicants.
There are very few lenders willing to consider the income of all four mortgage applicants, however, some examples are:
- Bath Building Society
- Tipton & Coseley Building Society
- Gen H - Consider six applicants in total but income from a maximum of four of them
How multiple-applicant mortgages work
A multiple-applicant mortgage can make buying a property easier, especially where the income of all applicants is used in the loan calculation, as it will typically allow you to borrow more. Sharing the responsibility of the mortgage repayments among more applicants will also reduce the cost for each individual.
All applicants on a mortgage will need to meet the lender criteria, whether or not they have an income and regardless of whether it’s being considered as part of the loan calculation.
Beyond that, the mortgage will work the same as any other joint mortgage, so it can be a joint-tenancy mortgage, where each applicant owns an equal share of the property or tenants in common, where the ownership and liability is split as desired.
Either way, all applicants are equally responsible for the mortgage payments. So if one borrower doesn’t pay, the other applicants become liable for the whole debt.
Tenants in common is usually more suitable for commercial property purchases where the buyers are business partners, as this allows each applicant to sell their share of the property independently. It also means that their share of the property is not automatically transferred to the other owners in the event of their death, like with a joint tenancy mortgage.
Read mire in our guide to tenants in common vs. joint tenancy mortgages.
Who can go on one together?
Multiple-applicant mortgages can be used for both residential and commercial purposes, so there are many potential applicant set ups, from family and friends, to business partners.
Some examples might be:
- Partners in a relationship with a parent or grandparent helping them with affordability
- A group of friends, cousins or siblings that want to live together
- Business partners investing in a buy-to-let property
- Parents and their adult children
Compare rates on multiple-applicant mortgages
You can compare rates online with our simple ‘choose your own mortgage’ option, or speak to an adviser who will happily help you compare the deals from multiple-applicant mortgages.
Whether you’re looking to maximise your spending power or simply reduce the financial burden in repaying a large mortgage, we can help you find the most suitable lender with the best rates for your circumstances. Get started below:
Compare multiple-applicant mortgage rates for FREE
How much could you borrow as a group?
We’ve already discussed that not all lenders will consider the income of every applicant, but there is also some variance in how lenders apply their LTI (loan to income) multiples for multiple-applicant mortgages.
Similar to joint mortgages, some lenders will combine all incomes and apply the same multiple, usually around 4.5, but some lenders offer more, depending on individual circumstances. Others combine the income of the two highest lenders and then add the income of any additional allowed lenders. Often, however, the more applicants there are, the lower the LTI offered.
To ensure you opt for the lender that’s most able to maximise your combined income, speak to one of our experienced brokers now. At Teito, we organise multiple-applicant mortgages daily, so can ensure you make the most of your finances.
Enter the combined income of all of the mortgage applicants into our calculator below to get a rough idea of your maximum borrowing:
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 me 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
For those looking for affordability support, but not wanting to buy with a group of people, perhaps first-time buyers, for example, there are a couple of alternatives that could work.
Joint borrower sole proprietor (JBSP) mortgages
A JBSP mortgage allows additional applicants, usually parents or other relatives, to include their expendable income in the loan calculation, to increase your affordability. These relatives would also be equally responsible for repaying your mortgage, so keep in mind that if you don’t keep up with the repayments, it would fall to them.
However, the difference is that the main applicant(s) own the property outright, those supporting the mortgage from a financial perspective don’t have any ownership over the property and do not appear on the deeds. It’s therefore most suited to trusted familial relations.
Guarantor mortgages
Similar to a JBSP, a guarantor mortgage helps those buying a home by allowing for additional financial support from individuals who have no legal stake in the property ownership.
This can be slightly riskier than a JBSP mortgage, as the non-owner applicants use their collateral, which is either personal savings, or a financial asset, such as their own home, to secure the borrowing. This is often in lieu of a deposit, or to balance the risk for applicants with a low income.
Why choose Teito for your multiple-applicant mortgage?
We specialise in multiple-applicant mortgage applications, so can provide tailored advice for a wide range of situations, whether you’re buying a residential or commercial property. With Teito, we allow customers to choose whether to compare the latest rates for free independently or benefit from a free, no-obligation chat with one of our mortgage advisers.
Other multiple-applicant mortgage borrowers came to us for:
- Access to the latest rates in seconds
- Brokers-exclusive deals on multiple-applicant applications
- Services that are rates 5-star across all leading review websites
- Secure an agreement in principle in minutes
Ready to compare the latest rates and take advantage of a free, no-obligation chat with a broker who specialises in multiple-applicant mortgages? Get started here.
FAQs
It depends on how the mortgage was set up. It would be more complex, but not necessarily impossible with a tenants in common mortgage. However, keep in mind that either way, the person taking on sole responsibility for the mortgage would need to meet the affordability criteria on a mortgage that previously required multiple incomes, which could be difficult.
You can read more about transferring mortgages to another person in our standalone guide.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.