Multi-Person Mortgage
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Multi-Person Mortgage
What is a multi-applicant mortgage? Is this also known as a multi-person mortgage?
Absolutely. A multi-applicant mortgage is an application for three or four people, as opposed to a traditional joint or sole mortgage application. It’s known by a few different names.
How many people can be named on a mortgage? How does this differ from a joint mortgage?
Three or four applicants can apply on a multi-applicant mortgage. The key difference is that not many lenders accept applications from more than two people.
It needs to be a more specialist lender to consider multi-applicants. Some lenders will only accept multiple applications from a family group. There’s more limited choice, but various lenders will lend to three or four unrelated borrowers – like a group of friends.
In this sort of situation, specialist advice is recommended, because finding the right option can feel like searching for a needle in a haystack.
Who can get a multiple applicant mortgage? Who is eligible for one of these?
Some lenders only accept multi-person mortgage applications from the same family group.
A smaller number of lenders will consider applications from borrowers that are not related.
How do multi-applicant mortgages differ from standard mortgages?
In the main, they’re very similar. Multi-applicant mortgages work in a very similar way to other residential mortgages.
One key difference is that all borrowers are legally responsible for the payments and all have ownership rights over the property. Generally, all applicants will need to live in the property being purchased, i.e. they are owner-occupiers.
Just to complicate matters, there is a scheme as Joint Borrower Sole Proprietor (JBSP) and it’s perhaps worth explaining quickly what this is.
A Joint Borrower Sole Proprietor mortgage allows multiple people to share the responsibility of the mortgage repayments, but only one person is the legal owner of the property. There may be other applicants supporting the borrowing, but only one owner. This is another form of multi-person mortgage.
What types of properties can you get a multi-applicant or multi-person mortgage on?
You can generally buy any property type through a multi-person mortgage, although some lenders may have restrictions on ‘non-standard’ properties. Those may require a specialist mortgage provider.
Standard construction is essentially a building made of bricks, mortar and stone with a slate or a tiled roof. Unusual properties that fall outside of standard construction can include listed buildings or a thatched cottage. These might require specialist mortgage providers to underwrite them.
If you’re buying a property of an unusual type and trying to combine it with a multi multi-applicant mortgage, it’s going to be quite complex. We’d really recommend speaking to us – or avoiding properties that are unusual.
How is ownership split between everyone with this type of mortgage?
There are two types of ownership of a property. It’s either ‘joint tenancy’ or ‘tenants in common’.
With joint tenancy, owners have equal rights to the entire property. This is typically chosen by a couple. If one dies, their share automatically passes to the surviving owner, which is called right of survivorship.
With tenants in common, each owner has a distinct, inheritable share which passes to their beneficiaries upon their death. Multi-applicant mortgages tend to be set up on a tenants in common basis.
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How much can you borrow for a multi-applicant mortgage?
This is what everybody always wants to know. The short answer is that it varies from lender to lender. With multi-applicants, some lenders may only use the highest two incomes, while others may use three out of the four. Some will use all of the applicants’ income by default.
How much you can borrow is not an easy question to answer, because it depends on the lender. Restrictions are sometimes also imposed based on the Loan to Value – that is, the amount of deposit being applied.
The bottom line here is that if you’re considering a multi-applicant mortgage, it’s best to get professional advice. Each lender has differing criteria around which incomes they would use. It’s much better to start by gathering all the information in and figuring out what can be achieved and which lenders should be approached.
What are the benefits of a multi-applicant mortgage? Are there any risks we need to know about?
The key benefit is that by grouping together, you may be able to raise a larger deposit.
As we’ve just touched on, it may be possible to borrow an increased amount because there’s more income to assess.
Equally, there’s shared responsibility for mortgage and bill payments, which can ease the financial burden when you’re first buying a property. It could also lead to faster home ownership – pooling deposits and increasing your affordability could get you onto the ladder more quickly.
Equally, sharing the costs for stamp duty and legal fees is helpful. It’s not just you – three or four people can split those costs.
The downside, I’d say, is how the property is owned. An important consideration is what happens if an individual no longer wants to be part of the mortgage – they would need to be bought out. How would that affect the dynamics? Unwinding the shared mortgage is probably one of the biggest considerations.
Are there any alternative options to a multi-applicant mortgage?
An obvious alternative is a Joint Borrower Sole Proprietor mortgage, where four people’s incomes can potentially be taken into account. It’s just the ownership that is different.
You may have four mortgage applicants whose income supports the affordability of the loan, but only one will actually own the property. Generally it’s used in family situations where mum and dad or other family members may be helping somebody buy their first property.
There are other schemes, too, like the Family Springboard mortgage, which allows guarantor type income to support a mortgage loan for someone to own a property [information correct at the time of recording in March 2025].
How can a mortgage broker help here? Is there anything else you’d like to add?
It will really help you to speak with a broker like ourselves. We’ve got experience in dealing with many lenders, and sorting the wheat from the chaff. It’s all about finding the right solution for you – whether that’s the lender that will get you to the right amount of borrowing, or has the most competitive costs.
We spend time understanding our clients’ needs and requirements to find the right solution. It’s much easier for you than arranging appointments with numerous different lenders that ultimately may not be able to help.
For a multi-applicant mortgage where all incomes are declared, we strongly recommend you get professional advice. We have relationships with the lenders. We know which will do what we need them to. It improves the chances of success and gets you a mortgage with less of a headache.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
