Can Two Friends Buy a House Together on Loan? Shared Ownership Explained

You know what’s wild? These days, splitting a mortgage with a friend is more normal than you might guess. When rent keeps climbing and salaries can’t keep up, teaming up to buy a place doesn’t sound so risky—it starts to seem smart.

Banks actually let friends apply for a mortgage together. You don’t need to be married, related, or even living together already. The trick is that lenders care about your credit scores, your incomes, and how you’ll split payments. Every name on the loan is on the hook if someone can’t cover their share—that’s a big deal. Not talking money up front? That’s where a lot of friendships have gone sideways fast.

But with the right plan, both of you could walk away from years of rent and start building something real. Let’s get honest about what to weigh up, the legal stuff no one wants to miss, and what you really need to make owning a home together with your friend a solid idea instead of a regret.

• Can Friends Get a Mortgage Together?
• How Joint Ownership Works
• Money and Legal Stuff to Sort Out
• Risks, Benefits, and Real-Life Stories
• Tips to Make It Work Smoothly

Can Friends Get a Mortgage Together?

This comes up a lot, especially with house prices where they are now. Here’s some good news: yes, friends actually can apply for a joint mortgage and buy a house together. You don’t need to be family or married couples—more banks are used to seeing friends team up for home loans. Lenders care less about your relationship and more about your money habits, credit scores, and income. So, if both of you can tick those boxes, you’ve got a real shot.

Here’s what it looks like in practice: you both get assessed. Lenders will check your credit history, debts, and income proof. Usually, you’ll be able to borrow more money together because two incomes look better than one. But heads up—if one person has lousy credit, it can drag down the amount you’re allowed to borrow, or even tank your application. Make sure you both know what’s on your credit report before you even start house hunting.

A lot of people don’t know that you’ll both be “jointly and severally liable” for the loan. That’s mortgage-speak for: if one friend skips payments, the other person is 100% responsible for keeping the bank happy. No splitting the blame down the middle. That’s why it’s so important to trust each other’s money habits.

Some lenders do have limits—like a max of two to four people on one shared ownership mortgage. Check with your bank or a mortgage broker early so you don’t waste time on places that just won’t work. Also, even though it’s possible, not every lender is cool with friends. A mortgage broker can steer you to the ones that don’t mind.

And for those thinking it sounds too good to be true—a 2023 survey showed almost 15% of first-time homebuyers in the UK did it with someone they weren’t married to. Friends teaming up for home loans really is a trend worth watching.

How Joint Ownership Works

So, how do you and your friend actually buy a place together? The classic way is setting up what's called a joint mortgage. Both your names go on the loan, and you both legally own the home. But here's where it gets interesting: you can set it up in different ways, and each matters if you ever want to sell, move out, or if one of you can't pay.

In the UK, for example, there are two main types of joint ownership: joint tenants and tenants in common. With joint tenants, you both own the whole property together. If something happens to one of you, the other automatically takes over your share. Most friends go for tenants in common. That way, each of you owns a specific part—like 50/50 or any split you agree on. This is a lifesaver if one person pays more for the deposit or monthly payments aren't evenly split.

• Joint Mortgage: Both friends are equally responsible for the loan. If one person stops paying, the other must cover the full amount.
• Deposit and Shares: Agree up front on who brings what to the buying table—maybe you save more for the deposit, or your incomes are different. Put this in writing.
• Legal Ownership: You choose if you want to be joint tenants or tenants in common when you sign the transfer deed with your solicitor.
• Exit Plan: It’s smart to set rules for what happens if someone wants to move out or sell. No one wants to argue about money or be stuck in the wrong home.

Lenders usually look at both your credit scores and incomes together. Don’t forget, if your friend has bad credit, that can tank your application—or mean you’ll pay more in interest. Based on recent stats from the UK, about 8% of buyers in 2023 teamed up with friends, not family or partners, to get on the property ladder. Not bad, right?

Once the paperwork is done, both of you are officially co-owners. That means you split the profits if you sell—and the headaches if things go wrong. Drawing up a declaration of trust or a co-ownership agreement helps dodge most drama, laying out exactly who owns what and what happens if plans change.

Money and Legal Stuff to Sort Out

Let’s get into the nuts and bolts. Before you and your friend even look at houses, you both need to know how your money situations line up—no hiding credit card debt or giant student loans. Lenders will check both your credit scores, so if one of you has bad credit, it can mess things up for both.

Here’s what banks actually look for when you apply for a joint mortgage:

• Both incomes: They’ll check you both, and usually add incomes together for a bigger loan—nice, right?
• Credit scores: If one person has bad credit, you’ll probably get a worse deal or get turned down altogether.
• Debts and monthly payments: Student loans, car payments, or existing credit cards all matter.
• Deposit size: You’ll need to agree on how much each person puts in—does everyone split it 50/50 or not?

The biggie though is what’s called a ‘declaration of trust’ or ‘co-ownership agreement.’ That’s basically a contract (done with a lawyer) that says exactly what happens if one of you wants to move out, can’t pay, or just changes their mind in a few years. If you don’t write this stuff down now, things can go haywire later. Consider things like:

• How will you split mortgage payments, repairs, and bills?
• What if someone loses their job—do you have a backup plan?
• If one wants to sell, do you have to agree, or can they find a new co-owner?
• Profit split—if the house gets sold after going up in value, who gets what?

If you’re curious, here’s a comparison of what happens when you’re ‘joint tenants’ versus ‘tenants in common’—which is the jargon you’ll see in all the paperwork:

Paperwork might sound boring, but it’s your safety net. If all you have is a handshake, one of you could be out on your butt armed with nothing but text messages to prove your side. Don’t skimp here—find a lawyer, get your co-ownership agreement down in writing, and make sure everyone understands it before you sign.

Risks, Benefits, and Real-Life Stories

If you’re thinking about joint mortgage and buying with friends, you want to weigh what you’re signing up for—both the wins and the headaches. Let’s get into what really happens when friends buy a house together on a home loan.

Benefits first:

• Bigger budgets. With two incomes, you unlock better properties than you’d afford alone.
• Shared bills. You’re halving (sometimes even splitting further) not just the mortgage but maintenance, repairs, council tax, and all the fun homeownership costs.
• You stay in control. No landlord deciding rent hikes or sudden moves—it’s your place, your rules.
• Building equity. Every payment chips away at the loan instead of padding a landlord’s wallet.

Now, let’s be real—here’s what can go sideways:

• Credit risk is shared. If your mate misses a payment, your credit score drops too, no matter whose fault it is.
• Life changes fast. One of you wants to move out, get married, or loses their job—what then? Exiting a joint loan is not as easy as ending a lease.
• Arguments over money. Plans can seem clear at first, but repairs, redecorating, or job losses test even the best-penned agreements.
• The market can shift. If house prices fall, selling might mean a loss, and you both need to agree on the timing.

To really see how this shakes out, check out these actual stories from the past couple years:

• Two friends in Manchester bought a small terrace in 2022. They drew up a legal agreement covering what happens if one wants out early. They got along, but when one got engaged in late 2024, he wanted to move out fast. The agreement saved their friendship—he bought his share back and moved within three months with zero drama.
• A pair in Bristol split a two-bedroom flat in 2021. One lost her job in 2023 and struggled with payments. They ended up renting out one room short-term (with the lender’s okay) to cover the gap. Tough? Yes. But they worked it out together and didn’t lose the house.

Some quick numbers show why more people are looking at shared ownership with friends. According to Halifax, joint mortgages between non-couples made up nearly 8% of all new first-time buyer loans in 2024. And in London, nearly one in five first-time buyers had a friend, not a partner, on the mortgage application. Clearly, it’s not just a backup plan—it’s starting to look normal.

If you’re considering this, remember: tackle problems up front, get legal help, and talk out “what if” scenarios before making anything official. That’s the best way to enjoy the good and dodge the worst.

Tips to Make It Work Smoothly

Treat this like a business deal between friends, not just a handshake. When you're thinking about buying with friends, just being 'cool about it' isn't enough—having clear rules up front saves headaches later.

• Put everything in writing. That means a co-ownership agreement: who pays what, how you’ll handle repairs, and what happens if one person wants out early. Lawyers actually have standard forms for this now, and the cost is usually split between you.
• Open a joint account for the joint mortgage and all home bills. Each of you pays your share into the account every month, and bills come out of there. No excuses.
• Talk about exit plans now. What if someone loses a job or wants to move? Spell it out while you’re both calm. For example, a typical setup: if one friend wants to sell or move, they give notice and the other gets first shot to buy them out at a fair price based on a professional appraisal.
• Stay realistic about money. Be upfront about how much you can each comfortably afford. Most banks only lend up to four people on a mortgage, but two keeps it simple. Both incomes help you get approved, but late payments hit both credit scores.
• Get home insurance with joint owners listed. Seems obvious, but some folks forget. If only one name is on the policy and your stuff gets wrecked, that’s a nightmare you won’t want to deal with.

A recent UK survey found that almost 1 in 10 first-time buyers tried some kind of shared ownership—that’s up from just 3% a decade ago. Friends teaming up is definitely trending, but the smoothest teams planned every detail.

Don’t gloss over disagreements—bring them up early. The strongest friendships handling a home loan together usually have regular money check-ins, especially as stuff like repairs or income changes come up. Honest convos make this work way better than trust alone.

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