Joint Mortgage But Only One Income

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Joint Mortgage But Only One Income

Can you get a joint mortgage with one income? How does it work? 

It’s definitely something we’re seeing more of nowadays, especially with childcare costs at record highs. It is definitely something that you can do.

It would work as a conventional mortgage with two incomes would. The only difference is that obviously having one income can put more of a strain on affordability. 

What you might find is that although you can get a mortgage, you might not be able to borrow as much as you hoped. Every lender will have different rulings around it and there’s quite a bit of a variance in terms of what you could be able to borrow.

Can I get a mortgage if I don’t work but my partner does? Can couples apply with a single income?

It’s definitely something you can do. It’s just the case that you’re going to have reduced affordability, due to having less income into the household. 

A lot of lenders will base their calculations on figures from the Office for National Statistics around utility bills, food costs and things like that. Because those costs are covered by one income rather than two, your borrowing might be reduced in comparison to someone applying on their own with one income. Essentially, you have a second person to cover with those living costs.

That’s then made worse if you have children. If there’s a stay-at-home parent and only one income, there are costs for children that can further reduce what you can borrow.

Should I just apply for a single applicant’s mortgage?

We do often have that conversation with clients in this scenario. There are pros and cons to each. If you were just applying in one name with one income, you might get better affordability than two people on the mortgage with only one income. 

The downside is that the majority of lenders will only allow one person to be on the property deeds if there’s only one on the mortgage. 

Let’s say the wife is the only income earner for example. If she applies for the mortgage in just her own name, it would only be her name on the property itself. Although established couples might be fine with this, having joint ownership of a property can be important. 

So there’s a tradeoff between having the mortgage and property in just one name versus having ownership and the mortgage in both names, with potentially a lower borrowing figure. 

It’s down to personal preference. Some people might be comfortable having one person named. Others might want the security of having both names on the mortgage and the property. 

Can you get a joint mortgage if the only income is self-employed?

It’s definitely doable. It is calculated the same way that a normal self-employed mortgage would work, generally by averaging out the last two years’ earnings. 

But having only one income and being self-employed can reduce what you’re able to borrow. A couple of lenders also have other requirements for the self-employed. For example, they may cap the percentage of the property they’ll lend on. Some might only give you a mortgage worth 75% of the property. 

It is still definitely doable, but there might be additional hoops to jump through. But every lender has different criteria, so if one can’t help you, the likelihood is that another one can.

How much does a couple need to earn to get a mortgage?

It varies, and it’s a regional thing as well, depending on the average house price in your local area. Gone are the days of lenders just giving you four and a half times your income. It’s not not that easy any more. 

There can be Loan to Income caps in the background and lenders will base affordability on a number of different things. We’ve touched on ONS data, for example, and we haven’t discussed other credit commitments like car finance, credit cards, personal loans and things like that. 

So it is really a case-by-case basis. If you’ve got self-employed income or earned income of say £40,000 a year, one lender might offer you four and a half times that amount, another might offer more while another offers less. 

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Whether it’s your first time, moving home or just looking for a better rate we would love to hear from you.

How are affordability calculations affected if there’s only one income on a joint mortgage? 

It’s always a case-by-case basis. You might get four and a half times your income with either a single mortgage or a joint mortgage with two incomes. But when you factor in the other person who is dependent on your income, that reduces what you can borrow. 

If you have children, that will reduce what you can borrow further. It will be different for every individual and every lender will have different calculations for what they’ll be able to lend.

What types of mortgages are available with only one income?

As long as you can demonstrate affordability, there’s no restriction on mortgage type. Whether it’s a First Time Buyer mortgage, a remortgage or a Buy to Let, for example, they are open to clients with only one income in the household. 

The main thing stems back to the affordability calculations and the criteria side of things.

Are there steps I can take to improve my mortgage chances if there’s only one income?

Speak to an independent broker. If you were to walk into a bank on the high street – which is obviously getting rarer nowadays – they can only offer you what their calculations and their criteria suggest. 

Brokers meanwhile have access to more than 50 or 60 lenders. We have a good breadth of knowledge and a wider panel to work with in terms of what you can borrow and who from. A broker will make sure you’ve got all your bases covered.

Can I get a joint mortgage with only one income if I have bad credit?

Absolutely. Going back to visiting your high street bank, if you have a CCJ for an unpaid parking ticket, the bank might take a view on it – but they might not. 

So speak to a broker with access to specialist lenders that are happy to deal with clients who have missed payments, CCJs and adverse credit. 

With specialist lenders, interest rates are higher, but it is still definitely possible to get a mortgage for a couple with one income if there are credit issues.

How do I get a joint mortgage with one income?

If it’s definitely something you’re considering, we’ll put a plan together and look at the right lender for your circumstances. You might be self-employed, or you’ve got bad credit, or you’re a contractor, for example… there’s lots of scenarios where there may only be one income into a household. It might even be benefit income or rental income. 

As long as there’s provable income, nine times out of 10 you’ll be able to get a mortgage. It’s just whether that will be enough to do what you want to do and at a rate you’re happy to pay. 

We can give you a roadmap as to what it all looks like for you. If you’re not in a position to proceed at this point, we can give you an idea of what to do to get where you want to be. That’s how we can help.

Your home may be repossessed if you do not keep up with your mortgage repayments.

The information contained within was correct at the time of publication but is subject to change. Podcast recorded in October 2023. Approved on 10.11.2023.