Joint Borrower, Sole Proprietor (JBSP) Mortgages

In this article you’ll learn how a joint borrower, sole proprietor mortgage works, which lenders offer them, what the advantages and disadvantages are and how a mortgage broker can help you get one.

What is a joint borrower sole proprietor mortgage?

Joint Borrower Sole Proprietor (JBSP) mortgages allow multiple applicants, often family members, to share responsibility for repayments. While all borrowers contribute, only one is listed as the legal property owner. Stable incomes from multiple applicants can lead to a higher chance of approval and borrowing capacity.

They can be a great first step to homeownership for younger people who would otherwise need to save for many years to buy a property of their own. They are also sometimes used to help elderly parents secure a mortgage with the support of a son or daughter.

JBSP mortgages are also occasionally referred to as ‘joint mortgage single ownership’ or simply as a ‘booster mortgage’

Eligibility and deposit requirements

While every lender has slightly different rules, you should expect them to assess both you and anyone else being named on the mortgage application against the following criteria:

• Affordability: Lenders will want to know the combined income of all applicants to calculate how much they can borrow for a mortgage. They do this by applying a multiple to that combined income (usually 4.5 x). They will also review your total outgoings to ensure there’s a healthy debt-to-income ratio overall and sufficient disposable income to cover the mortgage repayments. 
• Credit history: The credit records for all applicants will be reviewed by a lender to check for any bad credit issues – such as a recent bankruptcy or repossession, for example – that may be registered. It’s not impossible to get a JBSP mortgage with bad credit but it can make it more difficult depending on the severity of the issue, the amounts involved and the date it happened. 
• Deposit / loan-to-value (LTV):  The amount of deposit you have available will determine which lenders can consider your application. The more you have, the larger pool of lenders will be available, which means access to better interest rates. For JBSP mortgages, the deposit requirements are much the same as for a standard residential mortgage – anything above 10%-15% deposit should be sufficient for most mortgage lenders. The benefit of a JBSP mortgage is that both applicants can contribute towards this amount. 
• Other factors: The employment status of all applicants, age and the type of property you’re looking to buy will also be considered and assessed against a lender’s criteria. For example, if one applicant is self-employed then most lenders would want to see 2-3 years trading history with certified accounts made available to confirm your income. 

The more closely all applicants fit with a lender’s eligibility criteria the better chance you have of getting approved for your mortgage.

Advantages and disadvantages

The most obvious advantage of JBSP mortgages is that they allow people who would otherwise struggle to buy property to benefit from the goodwill of family to do so.

But there are some further reasons why these products can be a good choice in the right circumstances:

Advantages

• Access to cheaper deals: With the larger income and deposit you’ll get, you’ll be able to apply for better products than you otherwise could.
• Better choice of properties: While government-backed schemes such as Help to Buy may limit you to new-build properties only, you can use a JBSP mortgage to buy any property that’s acceptable to the lender.
• Tax planning: Your joint borrowers are not liable to pay any stamp duty or capital gains tax (but you will still need to cover these costs if the property you want to buy is above the current stamp duty threshold).
• Homeownership: You will own your home entirely, and you can take full responsibility for the mortgage once your income is high enough to do so.
• Bad or no credit history: applying with joint borrowers can be a good option if you have a low credit score or have not built up enough credit history. This is also true of a 2-person joint mortgage, provided the other borrower has a good record. If neither option is open to you, you may want to consider applying individually for a bad credit mortgage.

Disadvantages

• Some credit risk to all borrowers: even though your joint borrowers don’t have any rights to the property, they’ll be equally affected by any defaults, missed payments or any penalties incurred. This could of course impact family relationships.
• Not everyone on the mortgage has ownership. The idea of being responsible for repayments but not entitled to any equity may not be an attractive offer for everyone. Alternative options could be a family springboard mortgage or a guarantor mortgage, or you could take up a government scheme such as Shared Ownership or Help to Buy.
• Applicants’ ages: mortgage deals come with age limits on when the loan must be repaid, and this can be a problem where parents or other potential sponsors fall outside that range. You may be able to overcome this issue by opting for a mortgage with a shorter term, but this will likely mean higher repayments.

How to get a joint borrower sole proprietor mortgage

Your first step should be to make an enquiry with us so we can match you with a broker who specialises in joint borrower, and sole proprietor mortgages.

The JBSP mortgage specialist we handpick for you will walk you through the following steps to full application…

• Gathering the necessary documents and paperwork. This is required for all applicants and would include proof of income (payslips or certified accounts if either applicant is self-employed), copies of recent bank statements (for both affordability assessments and proof of deposit funds) and proof of I.D. 
• Downloading the applicants’ credit reports. This will allow you to review the records of all applicants and remove any inaccurate or outdated information that could hinder your chances of getting a mortgage 
• Finding the right mortgage lender. Your broker will be able to help identify the lenders who can specifically offer JBSP mortgages and also highlight the ones who offer the best rates

How much could you borrow?

Most lenders allow you to borrow up to 4.5x your income on a residential mortgage and this is exactly the same for a joint borrower sole ownership mortgage. The only difference is that the income in this case is the combined income of you and your co-borrowers.

See the table below for an illustration of how much you could borrow on a £30,000 salary being supported by a joint borrower or borrowers earning £50,000.

You can use our calculator below to see how this could work out for you, based on your own combined income for both applicants. 

Which lenders offer these mortgages?

Not all lenders offer JBSP mortgages, and there will be different conditions attached to each deal, so it’s a good idea to work with a broker who knows the market well and can quickly find the most suitable option for your circumstances.

Examples of products available include:

• Bank of Ireland offers joint borrower sole proprietor mortgages up to 95% LTV under its First Start scheme. It specifies that the sponsor should be a close relative of either applicant, usually a parent or step-parent. The maximum age of the sponsor is 60, not exceeding 80 years of age at the end of the term.
• Family Building Society accepts applications for JBSP mortgages where up to two people plan to live in the property and one additional borrower will support them. They advise that the homeowner will be expected to take on full responsibility for repayment of the loan after 5 years, so they’ll want to see evidence of an exit strategy.
• Barclays offers certain mortgages on a JBSP basis but states that all non-proprietor borrowers (sponsors) must take independent legal advice.
• HSBC and Santander and many other high street lenders do not currently accept them at all.

Please note lenders mortgage terms and criteria can be subject to change. Speaking to a mortgage broker is the best way to keep track of the terms and conditions available at any given time.

What interest rate to expect

At the time of writing (September 2023) Hinckley and Rugby Building Society are offering a 2-year discounted rate of 5.79% with a maximum LTV of 90% for a JBSP mortgage. Family Building Society are offering a 5-year fixed rate of 6.19% with a maximum LTV of 95% as part of their JBSP range. 

However, the most favourable deals are harder to get access to without a broker, as there are limited products available and some won’t be available to the public directly.

When would a sponsor come off the mortgage? 

There is no set timescale for when the sponsor would need to come off the mortgage – each lender will have different criteria. Some don’t have any stipulation for when this can happen. However, the Family Building Society states that the sole proprietor should be able to carry on the loan after 5 years.  

Can you get a joint borrower, sole proprietor buy-to-let mortgage?

Only a few lenders offer buy-to-let mortgages on a JBSP basis, and you will usually need a bigger deposit to access these deals. For example, Hinckley and Rugby Building Society currently offer buy-to-let JBSP mortgages at up to 75% LTV (up to 95% for residential borrowers).

We strongly recommend you get expert advice if looking to get a buy-to-let JBSP mortgage.

Get matched with a broker who specialises in joint borrower, sole proprietor mortgages

To ensure you get access to the best possible deals, we recommend speaking to a broker with particular experience in the JBSP market. They will be able to provide bespoke advice and guide you directly to the lenders who look most favourably on people in your situation, saving you a lot of time and stress in the process.

To benefit from our free broker-matching service call 0808 189 2301 or make an enquiry and we’ll match you up with the right advisor for your purchase.