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Getting a Mortgage With Multiple Applicants

With some lenders accepting up to 4 applicants on a mortgage, get access to more options with a specialist broker, or read our guide below.

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: May 4, 2021

Most mortgage lenders limit the number of applicants on a mortgage agreement to just two, but if you need to club together with more people than this to buy a property, options could be available. While multiple-applicant mortgages can be more difficult to come by, with the right advice from a broker who knows the market, they’re certainly not impossible to obtain.

In our guide to multiple-applicant mortgages, you’ll learn how many people can go on a single mortgage deed, how to get a mortgage with more than two applicants, what alternatives you should consider and how to find a broker who specialises in these deals. Plus in our FAQ section, we answer the questions we hear most often on this subject.

What is a multiple-person mortgage?

A ‘multiple-person mortgage’ is a mortgage with more than two people named on it, but not all mortgage lenders will allow more than two applicants to pool their resources this way.

If your plan is to club together with more than two people, the good news is that some lenders allow three or four friends or family members to be named on the title deeds; but they might restrict the number of applicants whose income can be declared.

If you’re applying for a multiple-person mortgage, you might have your heart set on an arrangement where all incomes are declarable to boost your affordability. This is possible but may call for expert advice from a broker who specialises in multiple-applicant mortgages.

How many people can be named on a mortgage?

Three or four people is usually the maximum, but the answer to this question tends to vary from lender to lender. There are a number of mortgage providers that will lend to two applicants on a joint agreement, not only to married couples or couples in a civil partnership, but also to friends buying together who will both live in the property.

Some providers will lend to multiple buyers where only one lives in the property and this is often referred to as a joint borrower, sole proprietor agreement (more on this later).

Three-person mortgages

It is possible to get a three-person mortgage, but keep in mind that some mortgage lenders will only consider this if all of the applicants are blood relatives. Others will allow friends and family to be named on the same deeds but won’t necessarily let all three applicants declare their income during the affordability assessment (limiting this to two people).

To get approved for a three-way mortgage where all of the applicants’ income is declared, your best bet is to speak to a broker who specialises in multiple-applicant mortgages. They have deep working relationships with lenders who offer these agreements with minimal caveats, so you can rest assured that you’ll find the right lender, first time.

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The benefits of a multiple-person mortgage

There are many reasons why getting a mortgage with multiple applicants can be beneficial, such as…

  • More deposit to put down: It’s possible for more than two family members or friends to club together to combine deposits and put down a bigger one than they’d be able to manage alone. There are many benefits to this, namely that a larger deposit could mean you have access to more favourable rates and deals, and would need to borrow less than you would if you only had one deposit to put down.
  • Combined income helps make payments more affordable: Monthly repayments on a mortgage that would seem daunting for a single buyer are often made more affordable with a multi-person mortgage.
  • You may be able to borrow more together: Mortgages for multiple applicants are based on an income calculation which works on the same basis as applying on your own. So, if you earn, say, £30k and could borrow up to 5x income, your mortgage would be capped at £150k. Adding two other applicants earning the same would increase that to £90k, which at 5x income would offer a maximum loan of £450k.

Calculating the maximum mortgage amount

When calculating the maximum amount you can borrow on a multiple-person mortgage, some mortgage lenders will only consider only an affordability assessment of the two highest income earners and cap the loan amount based on a multiple of their combined salaries.

Other lenders might be happy to apply the income multiple to three applicants and a handful of specialist lenders can consider the income of four applicants on the same mortgage.

Most lenders have a cap on lending at 4.5 times income, although there are a few who may go as high as 5 or even 6 times combined income. However, when you reach 5-6 times income level, most lenders are less likely to consider all the applicants’ incomes.

How to get a mortgage for four people

The main difficulty you’ll have here is finding a lender who’s willing to offer mortgages to four applicants based on their combined income and deposit amounts. Only a minority of mortgage providers will allow this many people to go onto a single agreement, and if you want every applicants’ funds to be declarable, you’re looking at only a handful of options.

With the choice of approachable lenders being so thin on the ground, the best way to get a four-person mortgage is to speak to a mortgage broker who arranges these deals every day. They will have a deep working relationship with lenders who offer multiple-person mortgages under these circumstances, so they can significantly increase your chances of approval.

The application process can be more complicated when four applicants are involved, since there’s four sets of paperwork to complete and extra things to consider, but this is another thing a broker can help you out with. They can guide you through the process from start to finish and make sure all of the documents are filled out correctly.

Alternative family mortgage options

There are other ways to get a family mortgage or a family-assisted mortgage without applying as multiple applicants. Here are some of the most popular alternatives…

Family offset mortgages

This type of arrangement could help you out if you only have a modest deposit to put down and a family member who’s happy to help you out financially.

With a family offset mortgage, the buyer is usually required to put in some deposit (5%), which can also be gifted, and the family member places money (say, 15-20% of the property’s value ) into an account, which is linked to the mortgage.

Meanwhile, the money cannot be accessed. The money saved is a grubstake, a deposit to help you obtain a mortgage with a lower interest rate (since the savings will be deducted from the value of the loan). This type of arrangement can be attractive to parents whose child is buying the first property with multiple applicants.

If there’s a dispute later between multiple applicants and they no longer want to house share, the parents’ money cannot be taken by the other parties. They will retain ownership of their funds. They do though need to save money that is locked up for an extended period, usually, a set number of years, or until their mortgage is 75-80% of the property value.

Guarantor mortgages

guarantor mortgage could be the answer if you can’t afford a mortgage on your own or can’t get approved for one. Here, the family member is acting as a guarantor on the debt if for any reason you can’t meet the mortgage repayments.

The guarantor will need to either secure your mortgage against a property they own and hold equity in, or place savings into an account held by the lender to boost the amount of equity you’d have. Usually, the guarantee will need to contribute 25% equity. Equally, if you keep up your repayments, your family member will have nothing to pay.

The risk for the family member exists if you are unable to meet your repayments and you default on the loan. They will be liable to pay and in order to do so, they might need to remortgage their home. In the worst-case scenario, their home might be repossessed.

Standard joint mortgage

joint mortgage is literally where the buyer and family go on a normal mortgage together, sharing the ownership of the property and liability for the mortgage. It can be simpler to set up and the family will, of course, share in any gains or losses.

Joint borrower sole proprietor mortgages

With a joint borrower sole proprietor mortgage, multiple people can make payments on the mortgage debt while a lone applicant lives in the property and is named solely on the deeds. They can be a potential option if you have family members who are willing to help you with your mortgage payments and don’t want to hold a stake in the property.

You can read more in our guide to joint borrower sole proprietor mortgages.

Can I get a mortgage with friends?

Yes. It’s possible to buy a property with friends and, generally speaking, the same rules apply as for any other buyer, although the lender may determine how many people you can put on the mortgage and how many incomes can be declared.

This is applicable to those who…

  • Want to add friends to their mortgage to improve the chances of approval (affordability, deposit, credit history etc.)
  • Want to buy together for a shared house to live in

If you’re buying with friends and putting in different amounts of deposit, then it may be important to consider protecting your investment in the property.

Buying as tenants in common

This is an alternative to buying as joint tenants and it involves buying a property with another person where both parties don’t own equal portions of it and can decide what to do with their share if they die. If you get a joint mortgage with friends, most experts would recommend getting a Deed of Trust written up with the help of a solicitor, outlining who owns what between you.

Bad credit mortgages with multiple applicants

Generally, mortgage applicants are as quick as the slowest wheel i.e. if one has bad credit and the other clean, the bad credit is still taken into account by the lender.

If, for example, you have three applicants on a mortgage and one of them has had credit issues. This means you may end up paying a slightly higher interest rate, depending on the severity and how recent the credit issues are. Interest rates and mortgage deals for those with credit issues looking to apply for a bad credit mortgage are extremely competitive currently, and many people are surprised by how attractive the rates are.

That said, some borrowers may still benefit from applying in sole name, particularly if issues are more severe and they are ineligible as a result.

As well as considering all of the multiple applicants’ credit scores, lenders will consider all of your incomes, your debt-to-income ratios and the size of deposit you are able to accumulate.

If one of your fellow applicants has bad credit, your overall credit score can be raised by others who have clean credit, though perhaps not enough to put you in a position for you all to borrow from a lender under the most favourable terms.

One solution is to ask for support from a co-borrower with a high income and good credit to come in on the loan. This could be a family member, as discussed earlier. Again, the co-borrower needs to be aware that they are responsible for any missed payments and that their beneficiary’s bad credit can, in turn, affect their own credit ratings. If you were to take in a mortgage without the bad credit applicant, you could potentially add them on later.

Multiple applicants on a buy-to-let mortgage

How many people can apply for a buy-to-let mortgage depends on the lender. Some lenders will lend to multiple applicants, such as a mortgage between three people, or more, seeking to purchase an investment property.

As with multiple applicants buying a residential property, there are a number of lenders who will lend to a maximum of four applicants. Similarly, some will consider only the income of two applicants, whereas a small number can consider a three-person mortgage or even up to four applicants.

Limited company buy to let

It is possible for multiple applicants to set themselves up as shareholders in a limited company for the purposes of reducing the amount of tax you will pay as buy-to-let landlords. Instead of paying income tax as an individual, a limited company pays corporation tax, which is currently set at 19%.

In theory, you should be able to continue to declare rental income after deducting the mortgage. However, a good deal of research is required or advice sought as even this tax saving could result in you ending up significantly worse off.

Tax implications

Instead of paying tax only on the difference between rental income profits and your mortgage interest payments, you can now only claim relief on 20% of the interest payments.

If you’re earning a salary as well as earning an income through a buy-to-let property, your total income might push you into the higher tax bracket. The 20% tax relief may well represent a severe reduction in benefits you would have enjoyed under the old system.

Speak to an expert

If you’re applying for a mortgage with multiple applicants, your first port of call should be to speak to a mortgage broker who specialises in these often-complex arrangements. They can help you find the lender who’s most likely to approve your mortgage and allow you to declare income and deposit amounts for every applicant, if that’s your plan.

We offer a free broker-matching service that can pair you up with a handpicked expert who specialises in multiple-applicant mortgages. We will take your needs and circumstances into account and introduce you to an advisor with the right knowledge and expertise to help you get the mortgage you want.

Call 0808 189 2301 or fill out an enquiry form and we’ll arrange a free, no-obligation chat between you and your ideal mortgage broker today.

FAQs

Who can be on a joint mortgage?

Although joint mortgages are most commonly taken out by two spouses, there are lenders who allow two family members to take one out together, or even two friends.

How do you split the ownership of a multiple-mortgage property?

If you wish to buy equal shares of a property with others, you would take out a joint tenants mortgage.

This means that:

  • If you decide to sell up the property, you will share the proceeds equally.
  • In the extreme case of one tenant dying, the other borrowers would inherit the deceased’s share of the property.
  • If one tenant decides at some stage that they want to move out, they can sell their share of the property. In this instance, the other tenants can either buy up that share outright or if they need to borrow money in order to do so, they will need to extend their mortgage. The ability to do this will rest with the applicants’ mortgage company, who will assess whether the remaining applicant or applicants can afford the higher mortgage repayments.

If each applicant wants a predefined share in the property, you should apply for a tenants in common mortgage. With this type of agreement, you will all legally own either equal shares or a percentage of the property to be agreed upon. The legal document specifying the percentages owned by each of the applicants (drawn up by a solicitor) is called a ‘Deed of Trust’.

The same rules apply as they do for joint tenants should anyone want to move out and sell their share of the property.

At some time in the future you may all decide to sell up and split the proceeds of the sale of the property between you according to the percentages agreed upon in your Deed of Trust. Or you can sell your share of the property separately or even grant it in a will.

Be aware that while you’re in a joint mortgage, regardless of whether it’s a joint tenants or tenants in common mortgage, your credit record can be affected and that will influence how a lender will view you in future.

What impact will deposit source have on a multiple applicant mortgage?

With a lot of lenders, deposits need to be from the people on the mortgage. If someone is gifting a deposit that’s fine, but lenders can restrict who this is – direct family are usually the only relationship that is widely accepted. Some lenders however, are happy with more distant relatives (cousins, uncles, nephews etc.), business partners or friends, so you can have 3 people on a mortgage.

Lenders will allow gifted deposits from family members which you can add to your own savings and any contributions you might acquire from a Help to Buy scheme. Who the lender will approve of as a provider of a gifted deposit varies but follows a distinct pecking order.

Most lenders will accept a deposit gifted by parents, then in order of less likely relatives they will accept from:

  • Grandparents
  • Brothers and sisters
  • Uncles and aunts
  • Extended family
  • A few lenders consider gifted deposits from friends, though it is possible.

If someone is gifting a deposit and living in the property, without being on the mortgage, almost all lenders decline with a few specialists the exception.

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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