4 Person Mortgage
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4 Person Mortgage
Sam Hubbard talks to us about a four-person mortgage.
Can I get a mortgage with four people? Can a house be owned by four people?
Yes, up to four people can apply for a multi-person mortgage. In England and Wales, there is no limit to the number of people who can be beneficiaries of a property. But only those named as legal owners can do so.
So, if more than four individuals want to own a property, it’s typically structured in a Trust where the legal owners hold the property for the benefit of the beneficiaries. That probably sounds like double Dutch, but basically, if there are more than four potential owners, it’s best to get legal advice.
Can I get a mortgage with friends?
Yes, it’s feasible to apply for a mortgage with friends. Some lenders may be a little restrictive and only lend to family members if four people are applying. However, other lenders will lend to a group of friends.
How do mortgages with four or more applicants work?
In principle, this type of sort of mortgage scheme is no different from either a couple buying together or somebody buying on their own. The application process is pretty much the same.
An application is made by the four individual people, based on their income and financial circumstances. Generally the property will be owned in equal shares.
However, different circumstances could also work. You might split the ownership into different percentages by using a type of purchase called tenants in common. You could own 40%, 30%, 20% and 10%, for instance.
What deposit do you need and how much can you borrow with four people on a mortgage?
The good news is that deposit levels are the same as for any other mortgage. For a mortgage with four applicants, you typically find that the minimum deposit level would be 5% of the property value.
It’s worth noting that higher deposits will typically result in a lower interest rate and consequently lower monthly payments. The greater the deposit, the lower the Loan to Value and the less risk to the lender – so they’ll offer effectively better interest rates.
What documents do you need with the four people on the same mortgage?
It’s all about being prepared. We always advise our clients to get everything lined up to make it nice and easy – and hopefully stress-free.
The standard supporting documentation includes proof of your income – your last three months pay slips if you’re employed, or your tax calculations and overviews for the last couple of years if you’re self-employed, or a director of a firm.
Other important documents are the last three bank statements for all applicants, showing your income and your expenditure – which must correlate. If you need to tidy up bank statements, give yourself three months notice and make sure there’s no unnecessary spending on there, or any bad habits.
You’ll all need proof of ID with a passport or driving licence with your current address. We need proof of address, too, with a household utility bill from the past three months.
Then it’s proof of your deposit. Where’s it coming from? Can you prove it’s from funds within the UK?
Does it cost to add someone to a mortgage?
At the point of the initial application, there are no additional costs, whether you’re applying with one person on a mortgage or more. However it works differently further down the line.
Perhaps two people own a property and they want to add a third person in as an equity holder. In that case, a new application would need to be underwritten, adding the third individual.
At that point, a legal or conveyancing transaction would also take place. Typically the cost of adding the third person on would be around £300 to £400 pounds. It’s called a transfer of equity.
There may also be mortgage costs – perhaps a valuation fee or arrangement fee, depending on the type of product you choose.
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Do you pay stamp duty when adding someone to a mortgage? What other costs do we need to know about?
Stamp duty transactions are getting increasingly complex and very much depend on your individual circumstances. As mortgage brokers, professional indemnity insurance doesn’t cover us to give advice on this.
If you’ve got an in-depth stamp duty question, you should seek relevant professional advice, through either an experienced property conveyancer, independent legal adviser or a specialist in property tax.
We can refer you to people like that. But as I say, it all depends on the situation.
What are the pros and cons of having four people on a mortgage?
A key benefit is that you may be able to raise a larger deposit more quickly with multiple applicants. Plus, it may also be possible to borrow an increased mortgage amount by using additional people’s incomes. The lender will tend to take into account all four people’s earnings.
Another benefit is shared responsibility for mortgage and bill payments, which can obviously ease the financial burden when you’re purchasing a property. Possibly you’ll get to buy a house faster, by pooling deposits and increasing your affordability. Again, you would benefit from sharing costs for stamp duty and legal fees.
The downsides are around how the property is owned. For instance, if you buy as four people, what if somebody within that group of people eventually wants to be bought out? How will the other three feel about that, and is it affordable?
It’s important to think through the long-term considerations if somebody wants to get out of the agreement.
Which lenders offer mortgages to groups of four or more people?
There are not huge numbers of lenders for this, but a growing number are entering this space. It’s typically lenders that we’ve known for a long time, like Metro Bank, Leeds Building Society, TSB and Skipton, which are all fairly well known [correct at the time of recording in April 2025].
If you’re looking down this particular avenue, it’s a good idea to speak with people like ourselves. We’ll know the new lenders that are coming to the fore, and who’s offering the best deals.
How do you get a multi-applicant four-person mortgage? How can a mortgage broker help here?
I think getting advice in this arena is vitally important. Speaking to brokers like MMPE that specialise in arranging mortgages of this type is key.
To get approved for a multi-applicant mortgage where all parties’ incomes are declared, we need to see the complete picture. We need to understand which lenders will be able to deal with it, which lenders won’t, and then analyse who’s going to give us the best deal.
As brokers, we have existing relationships with lenders that suit groups of friends or family looking to buy a property. We always provide relevant advice and alleviate stress from the mortgage application process.
We will obtain a mortgage Agreement in Principle for you and submit the application on your behalf – and then liaise with the lender to get a suitable mortgage offer through.
Brokers can help in lots and lots of ways, but the key part is finding the right deal, ensuring it will be agreed and then getting that offer out – keeping everything stress-free.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
For specialist tax advice, please refer to an accountant or tax specialist.
