Parents On The mortgage? | First-time Buyer Options

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Today, we’re joined once again by Ifti, a trained accountant, mortgage advisor, and one of the founding directors here at WIS with over 10 years’ industry experience.

Q1: How can parents help their children get on the property ladder?

Gemma: There are a few different ways mum and dad can usually help: deposit, guarantor, or joint borrower single proprietor. Can you talk us through these?

Ifti:

Gifted deposit – The most common method. Parents give money as a gift, signing a gifted deposit letter.

Guarantor mortgage – Parents act as guarantors, stepping in if the child defaults.

Joint borrower, single proprietor (JBSP) – Parents join the mortgage to boost affordability but are not listed on the property deeds.

Q2: What does “Joint Borrower, Single Proprietor” (JBSP) actually mean?

Ifti:

Example: If I earn £40,000, a lender may offer me around £180,000 (4.5x income). But if I need £250,000, I’m short.

I can add my parents to the mortgage to bridge the gap.

The parents are on the mortgage but not on the property deed. I remain the sole proprietor.

They help with affordability, but if I default, they’re still responsible for the mortgage payments.

The long-term goal is for me to eventually own the house myself once I can afford it.

Q3: How does JBSP differ from a guarantor mortgage?

Ifti:

Guarantor mortgage: Parents guarantee repayments if I default but are not part of the mortgage itself.

JBSP mortgage: Parents are named on the mortgage and assessed as applicants, but not on the deeds.

Both make parents responsible if repayments are missed, but legally they work differently.

Q4: Are mortgage rates higher with JBSP mortgages?

Ifti:

Rates are usually the same as standard mortgages.

The challenge is that not all lenders allow JBSP.

This can mean fewer options, and sometimes you may need to go with a slightly higher rate lender.

The good news: More high street banks and building societies are now offering JBSP, making it easier.

Q5: How does stamp duty work with JBSP?

Ifti:

Normally, if parents are joint owners and already own a property, you’d pay an extra 3% additional stamp duty.

With JBSP, parents are not on the deeds, so it’s treated as if only the child is buying.

Result: The child qualifies for first-time buyer relief if applicable—no additional 3% charge.

Q6: Does the age of the parents matter in JBSP?

Ifti:

Yes. Many banks cap the age at 70. For example:

If I’m 40 and my parents are 60, the maximum mortgage term may only be 10 years.

Some banks allow up to 80 years of age, depending on job type (less labor-intensive roles are more acceptable).

Best to speak to an advisor to match the right lender to your situation.

Q7: Can parents’ pensions be taken into consideration?

Ifti:

Sometimes, but not always.

Many lenders are more focused on whether parents can continue working into later years.

Pension income can help, but it’s not always the deciding factor.

Q8: Are JBSP mortgages more expensive than conventional ones?

Ifti:

Interest rates: Generally similar, though the cheapest JBSP option may be slightly higher than the absolute cheapest standard mortgage.

Legal fees: May be a little higher due to the structure of the mortgage.

Stamp duty: Savings compared to a standard joint mortgage, since parents aren’t on the deeds.

Product fees: About the same as conventional mortgages.

Q9: Do you have any extra tips for families considering the Bank of Mum and Dad?

Ifti:

House prices have risen faster than salaries, creating affordability gaps.

Many people assume the only way parents can help is with a deposit, but other options like JBSP exist.

Always speak to an advisor—they can highlight schemes you may not even know about.

Disclaimer

These points may or may not apply to everyone. Please check if they suit your circumstances.

If you don’t have an advisor, we at WIS are always happy to help.

Remember: Mortgages are secured against your home. Your home may be repossessed if you do not keep up with repayments.

Gemma: Thanks again, Ifti, for the great advice. We’ll be back next week with another episode of Let’s Talk Money and Mortgages. Have a great day, stay safe, and we’ll see you soon!