Should you buy in one name or both?

Most couples put both names on the mortgage. You do not have to, and a mortgage in one name suits some situations better than others.

Here is what changes either way.

Why Some People Buy in One Name

The most common reasons are:

• One partner has missed payments or defaults on their credit file
• One partner has owned a home before, and the other has not
• One partner has a much stronger or steadier income
• One partner is self-employed with only a short trading history

Any of these can make a sole application the simpler route.

How Much You Can Borrow

This is the biggest trade-off.

Lenders usually work out your maximum loan by multiplying your income, commonly by around four to four and a half times. One applicant means one income in that sum.

Take two examples on a 4.5 times multiple:

• One applicant earning £35,000 could borrow roughly £157,000
• Two applicants earning £35,000 and £30,000 could borrow roughly £292,000

Your credit history, existing debts and outgoings all affect the final figure, so treat these as a rough guide rather than a quote.

If the sole application only stretches to a home you would not want to live in, it has not solved the problem.

Stamp Duty for First-Time Buyers

First-time buyers in England and Northern Ireland pay no stamp duty on the first £300,000, as long as the home costs £500,000 or less.

One rule catches a lot of couples out. If you buy together, you both have to be first-time buyers to claim it. If one of you has owned a home before, anywhere in the world, the relief is lost on the whole purchase.

Some couples buy in the first-time buyer’s sole name for this reason. On a £350,000 home that is a meaningful saving.

The rules work differently again if either of you currently owns another property. Mention it early and we will flag whether it affects you, and point you to a tax adviser if it does.

Who Owns the Home

The name on the mortgage and the name on the deeds usually have to match. Most lenders expect everyone named on the deeds to be named on the mortgage too.

That matters if you are not married. There is no such thing as common law marriage in England and Wales. A partner who is not on the deeds has no automatic right to a share of the home, no matter how long you have lived there or how much of the mortgage they have paid.

Two things are worth asking a solicitor about:

• A declaration of trust, which records what share each of you owns. Useful if one of you puts in more deposit than the other.
• How you hold the property. Joint tenants means an equal split. Tenants in common lets you own unequal shares.

Sort this at the point of purchase. It is far harder to unpick later.

Joint Borrower, Sole Proprietor Mortgages

There is a middle option. A joint borrower sole proprietor mortgage puts more than one person on the mortgage, with only one person on the deeds.

The extra income counts towards what you can borrow. The person who is not on the deeds does not become an owner.

They are still fully responsible for the monthly payments, and the mortgage shows on their credit file. It is most often used by parents helping a child buy, and it can work for couples too.

Protecting a Single Income

A mortgage in one name means one income covering the payments every month. There is no second wage to fall back on if you are made redundant or cannot work.

Life cover and income protection do more work in a sole-name mortgage than a joint one. Worth pricing at the same time as the mortgage rather than putting off.

How Turtle Mortgages Can Help

The right answer depends on your circumstances, and it usually becomes clear quite quickly once we have the full picture. We will:

• Check what each of you could borrow alone and together
• Look at how your credit files affect your options
• Explain what a sole application means for stamp duty and ownership
• Search lenders across the market, including those offering joint borrower sole proprietor mortgages

Our advice is fee-free. We are paid by the lender, so there is no cost to you for finding out where you stand.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

This article is general information and not advice. Stamp duty treatment depends on individual circumstances and may change in future. We do not provide tax or legal advice.

Turtle Mortgages Ltd is an Appointed Representative of The Right Mortgage Network Ltd, which is authorised and regulated by the Financial Conduct Authority.

Turtle Mortgages Ltd (15804362) is registered in England and Wales, 1, Allied Business Centre, Coldharbour Ln, Harpenden AL5 4UT.