Mortgage for a couple where one partner is not a first time buyer

Question

There is a married couple in the UK where partner X owns a share of a property, while partner Y doesn't (i.e, Y is a first time buyer per se).

Can partner Y apply for a mortgage alone (in order to qualify for "first time buyer") but use for a part of the their deposit some money of partner X?

Answer 1

As far as a mortgage is concerned you'd need to talk to your bank. They may be prepared to write a mortgage for one of you but they would likely look at the finances of the other person too whether or not they are on the mortgage, even more so if one person is lending money to the other to enable the purchase to go ahead.

So there's rarely an advantage to being a first time buyer as far as a mortgage is concerned, being a first time buyer is mainly an issue for Stamp Duty. And as far as Stamp Duty is concerned, married couples and civil partners are counted as one whether or not you buy a house singly or together. So partner Y would be counted as owning an interest in that property too by dint of their marriage or civil partnership and therefore not entitled to the first time buyer discount on stamp duty.

In order to qualify for the discount both parties would need to be able to state truthfully that they had never owned a residential property at any point.

Here's an official confirmation of the one unit rule although that is talking about purchasing additional properties it does say it applies in all cases.

The government will treat married couples and civil partners living together as one unit. This is consistent with other areas of the tax system including Capital Gains Tax private residence relief where married couples are entitled to relief on one residence between them.

If you want more confirmation, here's a more direct statement from the Home Owners Alliance that says the same thing.

Answer 2

The short answer is yes but there are implications.

• Partner Y must be able to afford the mortgage repayments on their financial circumstances alone which would reduce affordability compared to applying a mortgage as a couple.
• Lenders may be put off that partner Y requires money from partner X for the deposit, would X claim a portion of ownership due to contributing towards the deposit if the couple were to separate? These sort of things would concern a lender.
• You may have to get a mortgage at a higher rate due to having fewer lenders to choose from.

So you have to weigh up if the implications of doing this are worth the extra hassle / cost of doing it this way instead of getting a joint mortgage.