Joint Mortgage With Parents

Can I get a joint mortgage with my parents? How does this work?

Yes. There’s a bit of history to this. Going back a few years, lenders used to do ‘guarantor’ mortgages. Let’s say I was a First Time Buyer and my mum and dad had a mortgage. If they wanted to guarantor my mortgage, they would be named on my mortgage and also the deeds to the property.

But that would mean paying second tier stamp duty – which is expensive. It means the First Time Buyer doesn’t get the benefit of the free stamp duty, which is currently available up to £350,000 [podcast recorded in January 2025].

Lenders then created what’s called a Joint Borrower Sole Proprietor mortgage – which is still in joint names, but the parents aren’t on the deeds. That way, the First Time Buyer still gets the free stamp duty. Their parents are on the mortgage to maximise the borrowing, but it doesn’t have any effect from a stamp duty perspective.

A lot of people still call these guarantor mortgages, but actually these days it’s Joint Borrower Sole Proprietor.

Will I miss out on a First Time Buyer discount if I get a joint mortgage with my parents?

Not at all. You will still get the same deals on a Joint Borrower Sole Proprietor or a joint mortgage as if you were just doing it completely on your own. There are still the same First Time Buyer discounts.

What’s the difference between joint tenants and tenants in common?

You would normally talk to your solicitor about this rather than a mortgage advisor, but obviously I’ve been in the business quite a number of years, so I can give you the basics.

If you and I were a couple, married or otherwise, we would ordinarily get a mortgage as joint tenants. That means that if I were to die, the property would come straight to you. Equally, if you died, your share of the property would come to me.

If, for argument’s sake, we were friends or work colleagues and we were buying together to maximise how much we could get on a mortgage, we would do it as tenants in common.

What that means is if I died, my half of the value of the house would go to my next of kin rather than to you. If you died, your half of the property will go to your next of kin rather than to me.

What deposit do you need for a joint mortgage with a parent? How much can I borrow on a joint mortgage with parents?

The deposit is the same as with a normal mortgage. The maximum you could borrow is 95%, so it would be a 5% deposit.

The amount you could borrow would depend on your income, your parents’ income, their existing mortgage and both of your outgoings.

I did a mortgage last year, in June or July 2024. In that particular case, the dad was 57. The majority of lenders want the mortgage to be finished by age 70, so unfortunately, we could only go for a 13-year mortgage.

It wasn’t necessarily the deposit that was an issue, or how much they needed to borrow. It was the term, because of the parent’s age. It’s based on the eldest of the borrowers, so if his dad had been 50, we could have got a 20-year mortgage, and if he was 45, we could get a 25-year mortgage.

We could only get a 13-year deal. The client couldn’t take the mortgage on his own as he didn’t have enough income. He needed his dad for Joint Borrower Sole Proprietor, but he’s expecting a number of pay rises. He’s had one already since the middle of last year. It doesn’t quite give him the ability to take the mortgage in his own name yet, but every six months, as he passes an exam, he will get quite a large pay rise.

In the future we’ll look at remortgaging Dad off the Joint Borrower Sole Proprietor and move to a term that’s a little easier for the applicant in his sole name. This is where you tend to find that you need to chat through things like this with a mortgage broker.

Certain lenders specialise in Joint Borrower Sole Proprietor and a lot of their new business is based on this. If you went to a lender that doesn’t do it, you’re snookered – you may assume you can’t do it.
A mortgage broker will know which lenders will do this, which won’t and which are better or worse, and we’ll obviously talk about interest rates as well.

What eligibility criteria do I need to meet for a joint mortgage with my parents?

It’s similar to a normal mortgage. Lenders are looking at income and expenditure. For argument’s sake, if Dad’s on £50,000 a year, but he’s already got an £800,000 per mortgage, that’s an issue. Dad’s mortgage comes first.

The lender looks at mum and dad’s income, their affordability, liabilities and equally the applicant’s income and liabilities. Everything is taken as a whole.

Does a joint mortgage with parents have to be 50-50?

No, not at all. With a Joint Borrower Sole Proprietor, the affordability is whatever it is. It isn’t 50-50, because the parents are not on the deeds anywhere.

I did arrange one mortgage with parents on a property which was a council Right to Buy.
The mum had lived in the property for many years and it was in her name. The son had also lived there a long time and they had the opportunity to buy it in joint names.

As the mother was quite a bit older we had to do it over a short term and that actually was on a 50-50 basis. We did it as tenants in common rather than joint tenants, as there were also another two siblings. If anything does happen to Mum, the son would get 50% of the property and the two brothers would get 25% each.

It just goes to show that everybody’s circumstances are different. In that particular case, they’d had the Right to Buy paperwork, but it had run out because they were struggling finding a lender that would do it.

We chatted through it and it ended up being quite easy. Because it was a Right to Buy, they got quite a big discount of around 50%. The mortgage wasn’t a particularly big one, so it was quite manageable.

How will my parents’ age impact our ability to get a joint mortgage?

Just before Christmas 2024 one lender with Joint Borrower Sole Proprietor announced it would look at age 75 rather than 70, as long as the parents had paid into some form of pension.

Criteria changes on a regular basis, so even though we’re talking here in January 2025, by March it could have changed again. The majority of high street lenders look at age 70. The mortgage is based on the older applicant, but that age limit is subject to change at any stage.