A family-backed mortgage is similar to having a guarantor for a loan or rental agreement. It allows a borrower to include one or more family members or friends on the mortgage so that they can borrow a greater amount through combining their incomes.
Although all parties are jointly responsible for paying the mortgage, the property is only owned by the main borrower. This type of mortgage is also known as ‘joint borrower sole proprietor’ (JBSP).
Benefits of a family-backed mortgage
A JBSP mortgage can be especially helpful to first-time buyers, particularly if they’re buying on their own and at an early stage in their career and earning potential.
It is also a way for parents to financially support their children in buying a home, without having to tie up any of their capital in a property.
As well as increasing the amount someone can borrow and therefore the value of home they can afford to buy, this type of mortgage could also enable them to access lower interest rates and better loan terms.
Borrowing example
A rough guide, based on:
- Lending at a 90% LTV – i.e. the buyer has a 10% deposit
- 4.5 x earnings for the main applicant
- 2.5 x earnings for the non-homeowner applicant
A first-time buyer with an annual income of £30,000, buying on their own, might be able to borrow up to £135,000, giving them a property budget of £150,000.
However, if a parent or friend with an annual income of £50,000 is added to a JBSP application, the potential borrowing increases to £260,000, bringing the maximum property budget up to just over £288,000.
Potential downsides of a family-backed mortgage
While these JBSP mortgages offer great benefit to the main borrower, the supporting family member(s) or friend(s) should carefully consider their obligations and take both financial and legal advice before entering the arrangement.
Some key things to know:
- All borrowers are jointly and severally liable, so if the main borrower defaults on their obligations, the other person or people named on the mortgage must cover the whole payment amount.
- Having this financial obligation could negatively impact their own ability to borrow in the future.
- Although they may need to contribute towards or even cover the mortgage payments, they are not named on the title deed and have no ownership rights over the property.
If you would like to discuss whether a JBSP mortgage is right for you, or you’re a first-time buyer and want to find out more about your borrowing options, we’re here to help. You can get in touch with our team of experts by completing our online form, chatting with a support agent or calling us directly on 0800 144 4744.
Additional sources:
https://www.natwestgroup.com/news-and-insights/news-room/press-releases/our-updates/2025/apr/natwest-launches-family-backed-mortgage-to-help-first-time-buyer.html / https://www.money.co.uk/mortgages/guides/joint-borrower-sole-proprietor-mortgages
