When buying a property with a spouse, partner or family member using a joint mortgage, you will share ownership and financial responsibility for repaying your mortgage.
Typically, taking out a joint mortgage will allow you to borrow more than applying as an individual, as both incomes are used in the affordability assessment.
What is a joint mortgage?
A joint mortgage is where two or more people apply for a mortgage together, with the most common situation being between partners or spouses. Affordability calculations are based on the income of all applicants and the parties named on the mortgage are liable to repay the mortgage.
A joint mortgage is most commonly taken out on a joint tenant ownership basis, where each person owns an equal share of the property and if one person dies, their share of the property automatically passes to the other owner.
There is also the option of taking out a joint mortgage on a tenants-in-common basis, where there is a specified percentage of ownership, such as 60/40 or 70/30.
How lenders assess combined income
When lenders assess a joint mortgage application, they will look at the combined gross income. Mortgage lenders will usually approve around 4 to 5.5 times the total combined income of the mortgage applicants, depending on lender criteria. However, they will also take credit scores, outstanding debts and the deposit amount into the calculations.
If one person has a low credit score and/or high outgoings, this will impact the application and can limit the amount that the lender is prepared to lend.
