3 Person Mortgage
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3 Person Mortgage
Paul Collinson talks to us about three-person mortgages and how they work.
Can you have a three-person mortgage? Can three people be on the same mortgage?
Yes, you can have a three person mortgage. Some lenders allow this, and they take all three incomes into affordability. Others don’t take all three incomes.
If two people are already on a mortgage, you can also remortgage the property and add a third person. Bear in mind that this is called a transfer of equity, as we would be altering the deeds. It does incur an extra cost with the conveyancing side of things, which is around £300 to £400.
You can also add a third person to the mortgage, without putting them on the property deeds. That is explained in our episode on Joint Borrower Sole Proprietor mortgages.
Can you get a three-person mortgage with friends?
Yes, you can. It doesn’t have to be a partner or a family member. Also, with the Joint Borrower Sole Proprietor mortgage, the third person doesn’t actually need to live there, either – so we can look at that option as well.
How do mortgages with three or more applicants work?
It’s pretty much the same as those with two applicants. Initially, we look at the incomes and commitments from all three people, just to ascertain the maximum borrowing potential. We then carry on with the rest of the mortgage process as normal.
What deposit do you need and how much can you borrow with three people on a mortgage?
Most lenders will accept a 5% deposit as a minimum. There is one lender offering a zero deposit mortgage at the moment, as we speak in March 2025, but they’re very tight on criteria.
They look at various things, like the rental income you’re paying, and applicants cannot have owned a property in the last three years. The credit search is tighter, and applicants have to prove they’ve paid rent for at least 12 months. Lenders look at that rental income and factor it into the affordability.
With a 5% deposit or more, other lenders would just look at your income and commitments. We’d look at the whole picture for the clients that come to us so we can ascertain the borrowing amount.
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What documents do you need with three people on the same mortgage?
Pretty much the same as with one or two people on the mortgage. For employed people, we need your latest three-month pay slips. If you’re self-employed, it’s two years’ HMRC tax calculations and tax year overviews.
For both scenarios, we also need your latest three months’ bank statements and either a driving licence or passport.
Does it cost to add someone to a mortgage?
It does when you add someone in the normal way, where you add them to the deeds as well as the mortgage.
But if you just add someone to the mortgage and not on the deeds, like with a Joint Borrower Sole Proprietor mortgage, that wouldn’t be a transfer of equity.
To add someone to both, you would pay transfer of equity costs of around £300 to £400 currently [podcast recorded in March 2025].
Do you pay stamp duty when adding someone to a mortgage? What other costs are involved?
I can’t advise on the tax side of things, but if someone is added to the deeds, they would need to check what their stamp duty implications would be.
If they are only on the mortgage and not on the deeds, there would not be any legal ownership of the property in that person’s name. Stamp duty should not then come into it.
What are the pros and cons of having three people on a mortgage?
The main positive is increased affordability, so the amount of borrowing is higher and you can afford a more expensive property. You may possibly have a higher deposit with more people chipping in. Also, more people being liable to pay the mortgage increases security.
On the negative side of things, there’s a smaller selection of lenders – you’re not open to the whole of the market. It just means the deal might not be the absolute best deal, but we would find the best deal available based on your criteria.
Which lenders offer mortgages to groups of three or more people?
There are a few of them at present. The main ones are Metro Bank, Leeds, Skipton Building Society and Barclays. That’s just a few – there are more [correct at the time of recording in March 2025].
How do you get a multi-applicant mortgage or a three-person mortgage? How can a mortgage broker help here?
You just need to contact us here at Brick2Brick and we’ll run through the affordability and work out how much you can borrow. We’ll then obtain all the documents required.
Then, when you find somewhere and they accept your offer, we’ll start the ball rolling with the most suitable lender. We stay with you all the way through until the day you move in.
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