How do joint mortgages work?
Joint mortgages for residential properties work in the same way as a regular mortgage. You’ll pay a deposit, then take a mortgage on the remaining amount.
The people named on a joint mortgage can save for the deposit together and pay monthly repayments together. This can mean you’re able to borrow more than by yourself, as the lender will look at the combined income of both or all people.
You can also take out a joint mortgage to buy a home with:
- A partner
- Up to three other friends or relatives you plan to live with
- Friends or family members who want to help you buy a property but will not live with you
- A business partner who plans to invest in a property with you
If you want to update your mortgage you will have to get all the borrowers to agree. This includes making the decision to switch to a new mortgage deal.
If you buy a property with someone who is not a first time buyer, you will have to pay Stamp Duty.
There are two ways you can split the shares of your property with a joint mortgage:
Joint tenants
Joint tenants means that all the people who own the home have equal rights over it. This is common for couples who want to split ownership of the property.
The profits would be split among you all equally if you were to sell the property.
Tenants in common
Tenants in common means each person owns a different percentage share of the home. This is more common when buying with friends or family.
A solicitor will draw up a deed of trust. This is a legal document that show the percentage of the property you each own.
