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How much can a couple borrow for a mortgage?

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Jan 8, 2023

Emma Lunn

Fact Checked By:
Emma Lunn - Finance Editor

How much can a couple borrow for a mortgage in the UK right now?

As a mortgage broker, many people contact us asking for information on joint income mortgages. You may be a first-time buyer who is looking for a joint income mortgage.

We can introduce you to mortgage lenders who offer joint mortgages. Let us help you get your mortgage, click to get your quote below:

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What is the process of joint income mortgages?

Joint income mortgages are very common. They allow you to purchase a property with another person. Due to the fact that two incomes are usually higher than one, borrowing can be higher.

Joint income mortgages do not only apply to married couples. There are many options and possible combinations. After you have read the information,  get in contact with us so we can find the right lender for your needs.

With a joint mortgage, all parties are jointly responsible for making sure the mortgage payments are made as required.

You have the option to decide how ownership and equity are divided. The two main ways of doing this are ‘joint tenants’ and ‘tenants in common’. However, in both instances both parties will be liable for the entire mortgage and monthly repayments.

Most mortgage lenders will approve a joint income mortgage for two people. Some will also accept applications for three or four joint borrowers.

A mortgage broker such as Loan Corp can offer free mortgage advice, explain how much you can borrow, how the income multiples work and find you a mortgage provider.

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Who can get a joint income mortgage?

A joint income mortgage could be for:

  • Spouses
  • Civil partners
  • Friends
  • Family members
  • Partner companies
  • Joint mortgages between parent and child
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For couples, joint income mortgages

Most joint residential mortgages are taken out by married couples, civil partners, and cohabiting couples.

Taking both incomes into account for joint mortgages will usually result in being able to borrow more money.

Be aware that if a relationship ends and one person moves out of the property, the mortgage company could still pursue them for the debt.

For friends, joint income mortgages

Many lenders will approve mortgage applications from friends who are looking to buy a property for their own use or to rent it out.

Before submitting an application, it is wise to review the credit history of each applicant. This will impact the whole application if one applicant has a poor credit rating.

Be aware that your lender will require all payments to be made in full. If one applicant is unable or unwilling to pay their share, the other applicant(s), will be responsible for the difference.

Joint income mortgages for families

Joint mortgage applications will be accepted by most lenders with sole occupancy. This is where one applicant intends to live in the property. If a parent wants to help their child get on the property ladder, they can make a joint mortgage application.

It is best if the parent has a steady income and a good credit history.

Families can help in other ways too such as guarantor loans and where parents can use their property to secure their child’s mortgage.

Talk to our mortgage broker and specialist advisors for the best advice in this field.

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Joint income mortgages available for business partners

This application is for business partners who are interested in purchasing a property to rent.

Before submitting an application, it is up to the partners to agree on the ownership and equity allocation. This is a common scenario and most lenders are happy to consider joint mortgage applications.

What is the allocation of equity and ownership in a joint income mortgage?

When you purchase a property in joint names, there are two types of ownership: joint tenants or tenants in common.

A joint tenancy is when each owner has an equal right to the property and any profits from a sale are shared equally. The property is passed to the surviving owner if one of them dies. Joint tenancy is common for civil and spouse partners.

With tenants in common, a solicitor sets up a legal document specifying how much of the property each party owns. Shares can be held unequally, depending on deposit contributions or who pays most of the mortgage.

If you are looking for a joint-income mortgage, you should speak to one of our advisors.

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What is the maximum amount we can borrow to get a joint mortgage?

Traditionally lenders use a simple joint income calculator to determine how much a couple can borrow for a mortgage. This is based on their combined income.

A lender might offer a mortgage to a married couple who have a combined income of £60,000. The lender would normally lend up to 4 times the joint income, so £240,000.

The mortgage affordability calculator can give you an estimate of how much you might be able to borrow based on your income.

Is an income multiple the only way to determine how much you can borrow?

No, it’s not. As well as income multiples, lenders will also carry out an affordability assessment. This will consider various scenarios.

What if the couple has monthly outgoings that leave them with very little or no income? What happens if the interest rates rise quickly a few years after they have taken out their mortgage? Are the couple paying for childcare or university?

These ‘what-if’ scenarios and the volatility in the market have led to many changes since the Mortgage Market Review (MMR) in 2014. Lenders now take a more responsible approach to lending, using detailed affordability analysis before deciding how much a borrower can borrow.

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Are joint mortgages good for couples?

With joint mortgages, lenders still consider income multiples when deciding how much a borrower can borrow. Most lenders will lend 4 times a couple’s joint income, sometimes more.

Lenders who do not offer a maximum income multiple will most likely base their decision on applicants’ ability to meet the affordability criteria.

You can find more information about this topic in our article.

 

What affordability criteria are used by lenders to approve joint income mortgages?

Every lender will review each application individually and conduct an affordability assessment. Here’s a general overview of the areas that a lender will examine:

Income

Lenders will consider 100% of the base salary of an employed applicant. Lenders will also consider overtime, bonus schemes and regular commissions.

Self-employed applicants will usually need to provide evidence of trading activity over a time period. Lenders will typically consider self-employed income to be net profit from the business.

Lenders will require a track record of at least two or three years for self-employed applicants. A few lenders will accept a 12-month track record.

Lenders may also consider joint applications where one applicant’s income comes from other sources, such as rental income or government benefits. This scenario typically requires one applicant to have a solid track record of self-employment or employment.

Outgoings

A lender will also want to know your income and current living expenses. These expenses include your credit card and loan payments as well as utility bills.

A lender might request your bank statements to verify these expenses.

This may all seem like a lender is looking into your finances. However, they are actually doing it to make sure you can afford the monthly mortgage payment.

Future changes to your income and spending

To ensure that your financial stability is maintained, a lender may also stress-test your finances.

Lenders will need to be sure you can meet your mortgage obligations if interest rates rise, or if one applicant is unable to work.

These affordability assessments are done to ensure that both you and the lender have confidence that you won’t fall behind on your mortgage payments.

Each lender uses its own criteria to assess affordability.

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Is it possible to apply for a joint mortgage with only one income?

Yes. Many households rely on one income for their livelihood, either permanently or temporarily.

Many couples, married or not, might need one partner to stay at home with their children.

Lenders will accept joint mortgage applications that include one salary in these cases. As discussed above, affordability will only be applied to one set of incomes and not two. All applicants will be subject to credit history checks.

A lender may be considering future income and expenditure changes if a partner is not working but intends to work later on (for example, when the children get to a certain age).

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If we are retired, can we still apply for a joint mortgage?

Yes is the short answer. A mortgage can be obtained based on your retirement income. It is possible to get a mortgage based on retirement income if you are retired or nearing retirement.

Lenders will generally limit the maximum age they will lend to at the end of a mortgage term to 75. Some will loan up until 85 and some have no maximum age.

Another factor to consider is your income level. Typically, pension income tends to be lower than other types of earned income. This may limit the number of lenders willing and able to accept joint applications from retirees.

It can be difficult to apply for a joint income mortgage as you approach retirement.

What deposit is required for a joint mortgage?

There are no distinctions between single or joint mortgage applications when it comes to the lender’s deposit requirements. A general rule of thumb is that the larger the deposit you offer, the more lenders will consider your application, and the lower the interest rate will be.

Deposits of 20% are accepted by most lenders, while 10% will be accepted by some lenders. A few lenders will only accept deposits as low as 5%.

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If one or both of our credit histories are poor, can we still get a mortgage?

Bad credit ratings can cause problems when applying for a mortgage. This is true regardless of whether the application is on a sole or joint basis. It all depends on what type of issue you have had and when it was filed.

If you are applying for a joint mortgage with a bad credit applicant there are lenders that will consider applications from borrowers who have had credit problems in the past. There are also some ‘bad credit’ mortgage lender specialists who can help with these types of applications.

Some specialist lenders may consider:

  • Late payments and joint mortgage applications
  • Joint mortgage applications with defaults
  • Joint mortgage applications with CCJs
  • Joint mortgage applications and mortgage arrears
  • Joint mortgage applications and debt management plans
  • Joint mortgage applications with IVAs
  • Bankruptcy joint mortgage applications
  • Repossession and joint mortgage applications

Talk to a specialist in joint income mortgages

You can contact us today if you have any questions or would like to make an enquiry.

Relax and let us find the right broker for you. We do not charge any fees and you are under no obligation to go ahead.

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