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Joint Borrower Sole Proprietor
Steven Hargreaves answers the most commonly asked questions on Joint Borrower Sole Proprietor Mortgages (JBSP).
What is a JBSP mortgage and how do they work?
A Joint Borrower Sole Proprietor is when you’re asking somebody else to come on your mortgage with you to aid borrowing some more money. The majority of additional mortgage applicants are relatives. They should be aware however that if they wanted to buy a house in the future, they would have to pay Stamp Duty, because they are no longer a First Time Buyer.
When the proprietors are able to support the mortgage on their own, they can then Remortgage and the additional person that was on the mortgage to increase the borrowing can be removed. A lot of people used to refer to it as a guarantor mortgage, and the Joint Borrower Sole Proprietor is very similar, with some subtle differences.
With a guarantor mortgage the family member is also responsible for the monthly mortgage payments whereas on a JBSP, they’re only liable if the proprietor can no longer make the payments.
There are a few more hoops to possibly jump through from a lender’s perspective, and not all lenders offer JBSP, even some bigger banks and building societies, so it is a little bit limited.
What criteria do you need to meet for a JBSP mortgage?
You’ve got to be a First Time Buyer, and in the majority of cases it does have to be a family member that is added onto the mortgage. There are four lenders who would accept a non-family member.
Do you pay stamp duty on a JBSP mortgage?
A First Time Buyer wouldn’t pay Stamp Duty up to £300,000, on a traditional guarantor mortgage, if the guarantor already has their own home and mortgage, it would be classed as a second tier Stamp Duty for them, whereas with JBSP, that family member isn’t fully on the mortgage, therefore there’s no second tier stamp duty to pay.
What’s the difference between a JBSP mortgage and a Guarantor mortgage?
Guarantor mortgages are no longer commonly used, and one of the reasons for that is because of the stamp duty situation. From a financial perspective, it does make a big difference. The JBSP, if the circumstances are there, works out very well.
You are a little bit restricted, as the mortgage can only be run until applicants turn age seventy with some lenders, however some will extend this to seventy-five or even eighty. If you’re a twenty-five year old First Time Buyer, a thirty-five or forty year term would be typically available to you, but if your parent was on the JBSP and they are aged fifty-five or sixty, it will shorten the term of the mortgage available.
What else should I be aware of?
You can get onto that next level on the property ladder with family intervention, which has got to be a great big positive. It means not having to move in two or three years because you can purchase a more expensive property at the outset. You are tying that family member into having a mortgage with you for a certain period of time, so that’s got to be taken into account and it could prevent them from being able to move, which is not so positive.
As a broker, we would chat through a client’s circumstances and make sure they’re aware of everything that’s involved.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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Joint Borrower Sole Proprietor Mortgage (Part 2)
We welcome back Steven Hargreaves, to continue the conversation on Joint Borrower Sole Proprietor (JBSP) mortgages.
Is there a Joint Borrower Sole Proprietor mortgage age limit?
Yes, and that’s normally governed by the oldest applicant. In most cases, it would be the parents. If they’re acting as the Joint Borrower on a son or daughter’s mortgage, their age is a factor.
Most high street lenders look for the mortgage to be completed before age 70. That said, other lenders will go up to 75 or even 80 for Joint Borrower Sole Proprietor.
As an example, if your eldest parent is 59, on the high street you’re only looking at an 11-year mortgage, where the repayments could be incredibly expensive. That’s always the prohibitive side of it.
What documentation is required for both the Joint Borrower and the Sole Proprietor in a JBSP application?
It’s pretty much identical. Lenders are looking at how much you’re earning and what the liabilities are, for everyone on the mortgage. You would normally need three months’ pay slips and P60s. If anybody gets any annual bonuses we need the last two years’ bonus pay slips – then we can assess the affordability.
Are there restrictions on the types of properties that can be purchased with a JBSP mortgage?
There aren’t necessarily any restrictions on the type of properties, but different things are taken into account.
If you’re buying a terraced house, a semi-detached or detached house that’s freehold, there’s no ground rent or service charges. But if you’re buying a leasehold flat, those charges would apply and would be taken into account for affordability.
It doesn’t necessarily stop people getting a mortgage, but it can restrict how much you can borrow.
Can a Joint Borrower be added after the mortgage has already been taken out?
Not that I’m aware of – ordinarily you would need them at the outset. If I was earning £20,000 a year and that wasn’t sufficient to secure my new mortgage, I’d need my parents to act as Joint Borrowers at that stage rather than afterwards.
Can I get a JBSP mortgage with my parents? Can I get a JBSP mortgage with my children?
Yes, in both cases. Most commonly, children are buying the property and they want their parents to act as Joint Borrowers or a guarantor. That gives them the additional income required to buy. I have done one the other way around, where the children are acting as Joint Borrower for mum to buy her first house.
Each lender has different criteria. With the latter example where mum was buying, a number of lenders wouldn’t actually do that Joint Borrower Sole Proprietor mortgage. But we found a lender that would do it – which is the advantage of using a mortgage broker.
Can I get a JBSP mortgage with my siblings or friends?
Yes, and it can make affordability a little easier because they will be younger. With friends, you’re down to different lenders. A lot of lenders on Joint Borrower Sole Proprietor require blood relatives, but some don’t.
It’s a case of looking at each particular case on its merits and finding the lender that would fit.
Are there additional fees or costs associated with taking out a JBSP mortgage?
From a mortgage broker, or certainly when I do it, there are no additional costs. There are no additional costs from a lender, but most will ask the Joint Borrower to get independent legal advice.
That legal advice confirms how the arrangement works, what happens if people miss a payment and when they would step in. There is usually a cost for that advice. You may have to pay a solicitor a few hundred pounds to go through that and sign it off.
How does remortgaging a JBSP mortgage work?
You wouldn’t tend to remortgage a Joint Borrower Sole Proprietor unless the main applicant no longer requires the Joint Borrowers. That’s when you would do a remortgage and take mum and dad off the mortgage. You’re then standing on your own two feet.
Often with JBSP mortgages we just go back to the existing lender to do a product transfer while the Joint Borrower Sole Proprietor situation is still in place.
Then later, when the applicant’s employment and income is sufficient to manage that mortgage on their own, we remortgage to a new lender and do the Transfer of Equity at the same time.
What else do we need to know about JBSP mortgages?
I hope most of it’s covered. These mortgages can be a little bit more technical, so chatting through it with a mortgage broker is very beneficial. It helps just to get your head around it. It’s not difficult if it’s explained correctly.
Plus, a broker can help you find the right lender because there’s slightly different criteria. If, for argument’s sake, your mum and dad are 60 years old and you’re only looking at a 10-year mortgage, the mortgage repayments will be ridiculous. That’s when you’d look at a lender that would go to 75 or 80. We’re here to help you explore the options.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
Speak To An Expert
Our team of experts are experienced in catering for a range of clients, needs and property types. With a vast array of qualifications and accreditation from the financial accreditation agency you can be confident of quality service and sound advice.
Joint Borrower Sole Proprietor Mortgage (Part 3)
Steven Hargreaves answers some more questions on our final episode explaining Joint Borrower Sole Proprietor (JBSP) mortgages.
Can I use a JBSP mortgage to buy a second home or holiday home?
In theory, you could. It wouldn’t be something we would generally use a JBSP for. The main idea is for it to help a First Time Buyer get on the first rung of the ladder, while their income increases. The spirit of a JBSP is much more First Time Buyer-oriented than for second homes and holiday homes.
I guess it probably could be done, but there are possibly better ways around it than Joint Borrower Sole Proprietor.
Does the joint borrower have to live in a different property?
No, not all. They can live in the same property.
Can I switch from a standard mortgage to a JBSP mortgage?
Yes, you can. That’s an interesting question – it ties in with the question about buying a holiday home where I said this is generally used for a First Time Buyer. But, for argument’s sake, if you and I owned a property together and we were separating, perhaps I couldn’t afford that mortgage on my own.
If I wanted to stay in the house but couldn’t meet the payments independently, the lender wouldn’t let you come off the mortgage. But if I had a joint borrower that’s prepared to step in, I could keep that house using Joint Borrower Sole Proprietor.
So in separation or divorce this can be used, and it’s obviously not for First Time Buyers in this case.
How do interest rates compare for JBSP mortgages?
There’s no difference. It’s not a higher or a lower rate. On a standard 95% mortgage for a First Time Buyer and a Joint Borrower Sole Proprietor scheme, the interest rates would be the same.
Is it possible to use a JBSP mortgage for Buy to Let properties?
Again, I’m correcting what I said in the first place. It is possible to use Joint Borrower Sole Proprietor for a Buy to Let property – but that said, I’ve never seen it.
With a Buy to Let property, the borrowing tends to be based on the rental income rather than personal income. If you were borrowing £75,000 against a £100,000 property, it wouldn’t be based on you earning £20,000 a year – it would be based on the yield of that property.
Therefore you don’t tend to need a Joint Borrower Sole Proprietor on a Buy to Let. In theory, though, it could be done.
What happens if the joint borrower passes away or can’t pay the mortgage?
This would be the same in every case, whether it was Joint Borrower Sole Proprietor or not. You would have to advise the lender and they would confirm next steps. It could be that your income’s already gone up and you don’t need the income from that joint borrower.
Perhaps the joint borrower had an insurance policy to pay the mortgage off. There are all sorts of different variations and answers to that question. But effectively, the first thing you would do is make contact with the lender. You’d check whether there were life policies in place.
I’ve got a Joint Borrower Sole Proprietor going through at the moment where I’m arranging protection for both sides. God forbid anything happens to the person living in the house or the joint borrower, but if that happened, that mortgage would need to be paid. In this case, the life cover I’m arranging is inexpensive for the peace of mind that it provides.
Can I get a JBSP mortgage if one borrower has an existing mortgage?
Yes, absolutely. This happens in the majority of cases. A lot of the Joint Borrower Sole Proprietor mortgages I’ve done are where the son or daughter’s income isn’t enough, so therefore they need parents or other relatives to help.
In 9 out of 10 cases, the joint borrowers have loans, hire purchase and credit commitments, unsecured or secured. They’re just taken into account on an affordability calculator.
When we’re assessing affordability, we work out exactly how much the applicant owes on their credit, and the same for the joint borrower. That goes into a calculator to come out with the affordability.
Are there any special considerations for older joint borrowers in a Joint Borrower Sole Proprietor mortgage?
Things are changing very regularly on this. A few years ago, all lenders insisted that they wanted the mortgage finished by age 70. Well, if the joint borrower is 60 years old, that meant a very short mortgage, which often ended up being unaffordable.
A 30 year old child might end up needing a 10 year mortgage – but that was just too expensive. Since then, lenders have changed their approach and now, as long as parents have got pensions, many lenders can go to 75. I was speaking to a lender the other day that could go up to 80.
They are loosening their criteria around age. We’re recording this in July 2025 and probably by November 2025, what I’ve said here could be out-of-date. But certainly, the way lenders work with older people is to look at income, liabilities and pension arrangements.
I did one where we needed to know the size of the pension pot to work out how much could be drawn off each year – and how long that would last. It lasted longer than the mortgage, so the lender was quite happy. So there are considerations for older joint borrowers.
How can a mortgage broker help here? Have you got anything else to add?
This episode has been quite technical, which is unusual, really. Anyone who’s listened to this will realise that there are many different aspects to a JBSP and a lot to be taken into account. That’s where a mortgage broker can help – we’ll support you to win the battle and find that cheapest lender.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
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