New Build Joint Borrower Sole Proprietor Mortgage
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New Build Joint Borrower Sole Proprietor Mortgage
Matt Coulson and Richard Campo talk to us about a Joint Borrower Sole Proprietor mortgage on a new build.
Can I get a Joint Borrower Sole Proprietor (JBSP) mortgage on a new build?
You certainly can. Firstly, let’s explain Joint Borrower Sole Proprietor as a large proportion of people won’t have a clue what that is. It’s fundamentally a guarantor mortgage. There are some important technical differences, which we’ll expand on as we go.
It’s funny how lenders work – this is a criteria they have or they don’t. A bank may be happy to do a new build, happy to do Joint Borrower Sole Proprietor, and it may not affect the product.
The new build sector is a huge focus right now, as we record this in February 2025. We’ve got a new Labour government that has committed to building 1.5 million homes in this parliament. That’s 300,000 properties a year.
Last year, it was something like 234,000, only 900 properties more than the year prior. JBSP comes in because it’s a great way onto the market and more First Time Buyers tend to look at this. But it has many other applications. We’re talking about this explicitly in terms of new build, but anything we mention on JBSP actually applies for any mortgage.
Can I get a JBSP mortgage on a new build as a First Time Buyer?
It feels like this is a product designed for First Time Buyers first – but it’s available to anyone. It’s a classic ‘bank of mum and dad’ idea and that’s becoming more and more prevalent these days.
It’s very common for us now to be having conversations with a client along with another family member, perhaps a parent, about potentially joining that mortgage as a JBSP.
We’ve seen some good product innovation in this space, with some lenders having their entire proposition built around this. That can only be a good thing, because that ultimately drives down rates, prices and fees.
So absolutely, as a First Time Buyer, this is something that you should be considering if you haven’t already.
What criteria do you need to meet for a JBSP mortgage on a new build?
If you’re looking at a new build, everything I’m about to talk about is relevant – there’s no difference in criteria for a new build from any other property.
It’s worth touching on that technical difference around a JBSP versus a guarantor. In both instances, whether you’re a guarantor or JBSP, you’re not on the property deeds – only the person purchasing the property is. With JBSP, the guarantor is actually on the mortgage as well.
It’s a joint mortgage, but only one person is purchasing the property, hence, Joint Borrower Sole Proprietor. Two people borrowing, one person buying.
Everyone has slightly different criteria for this. But you always need to be able to afford all your outgoings plus the new mortgage. JBSP makes affordability much easier, and lenders also have more recourse to a borrower than they do to a guarantor.
In some instances, banks want you to be related. Typically that means joining up with siblings or parents. We often get parents helping children, and also children helping parents. As people get mortgages in later life, children are helping. It’s a real family thing.
Some will let you live in the property, and some won’t, if you’re the guarantor in the setup. So it’s really important to understand that situation. For example, is one person purchasing, and only one person wants to be on the deeds for whatever reason? Is it a family member helping someone to buy a property? Will they live there?
We can always find a way through it – we just have to be mindful of each lender’s criteria. Affordability is the key thing. Whether you’re the purchaser or the person coming on to support the mortgage, we need to do an affordability assessment.
Can you afford your mortgage, plus any existing commitments like school or nursery fees? At its core this is fundamentally a joint mortgage, which makes it simple and easier to apply for, but there are just some technical differences to be mindful of.
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Do JBSP mortgages require a larger deposit for new build properties?
Not really. Sometimes if you’re buying a flat or an apartment, lenders have a specific requirement around deposit when it comes to new build. We’ve talked about that in previous episodes – sometimes you need a slightly larger deposit for an apartment or a flat.
The JBSP aspect doesn’t make any difference. Some lenders could potentially offer this kind of mortgage with a 5% deposit – which makes it really accessible.
If you’re able to bring a family member or, in some cases, a non-family member to help the affordability, with a relatively small deposit it increases your reach.
Do you pay stamp duty on a JBSP mortgage for a new build property?
We don’t give tax advice, and stamp duty is a tax, but we can make a couple of statements about it.
For example, if you’re a First Time Buyer and someone is assisting you with the mortgage but will not be on the deeds, the stamp duty would only apply at the First Time Buyer rate. It isn’t based on the other person.
They might already have a property. And that is very important because for someone who owns a property there’d be a 5% stamp duty surcharge. This wouldn’t apply if that person is not buying the property.
You do need to get tax advice, because stamp duty is a big cost and not something to get wrong. Be aware of your tax status alongside any property schemes and changes in stamp duty. Go online and find a good calculator or, even better, talk to one of our advisors for more guidance on how things stand at that time.
Can I get a JBSP mortgage with my parents on a new build? Is there an age limit here?
General lender criteria applies here, irrespective of new build. And the age of the oldest applicant plays a part.
Typically, most high street lenders allow a term up to somebody’s 75th birthday. That’s changed in recent years as people are working and borrowing for longer and lenders have been pushing that age limit up.
A Joint Borrower Sole Proprietor mortgage can often not go beyond the parent’s 75th birthday. The owner of the property will need to afford it themselves beyond that point.
Some specialist lenders in this space have specific mechanisms for you to take off that person when they reach retirement age, as a bit of a helping hand. There are rules around retirement age that apply irrespective of a JBSP mortgage or a new build. They just need to be considered.
That’s where a really good conversation comes in. Many of our appointments are a multi-generational conversation – it could be a Zoom or a Teams call with the buyers and their parents. That conversation gets into the details around age and maximum mortgage term.
Are there any additional fees or costs associated with taking out a JBSP mortgage on a new build?
Joint Borrower Sole Proprietor is about criteria, it’s not a product, as such. If the bank approves you on their policy, you can get whatever their products are at that time. There’s no premium charge or special rate.
There are some specialist providers, though, with specific JBSP products, which might extend the retirement age or do something a bit more specialist. There’s a premium on that because it’s not a mainstream proposition. We can identify off the bat whether we need to do that or not. But fundamentally, there’s no extra cost.
Can I switch from a standard mortgage on a new build property to a JBSP mortgage?
Yes you can. It’s something that we are seeing more of, largely driven by the affordability squeeze. We’re recording this in February 2025 and things have been quite challenging with both mortgage rates and the general cost of living.
Sometimes it’s due to life circumstances – somebody reducing their working hours to spend time with their children, or perhaps getting divorced. People can suddenly need somebody, typically a family member but not always, to step in and help with mortgage affordability until the situation improves.
The natural trigger point for this is a remortgage. We always encourage our clients to be talking to us sort of seven, eight months out from their current mortgage deal ending. At that point, we have a discussion around affordability and whether there’s been any major change in your life. That could be income related, or a divorce or separation. We could then consider bringing somebody else into the equation from an affordability point of view. It’s definitely viable and possible.
How do interest rates compare for JBSP mortgages on new builds?
The interest rates are the same. The products and the pricing are broadly similar. One thing to mention is that a lot of lenders will insist on independent legal advice for the person who’s not going on the property deeds. That’s the person guaranteeing the mortgage – because they’re taking greater risk.
You have to find a separate solicitor to go through the contract with you and make sure you’re aware of the pros and the cons. There’s normally a charge of a few hundred pounds for that. It’s not specifically related to the mortgage, but it’s probably the only difference in terms of costs and process versus a regular mortgage.
How can a broker help with a Joint Borrower Sole Proprietor mortgage?
I would always recommend getting advice because ultimately that gives you the broadest information possible. This could feel a bit overwhelming if you didn’t have somebody guiding you through it.
There are some complexities, as we’ve touched on, but it shouldn’t be scary. If you’ve got a good advisor that can walk you through all the different lender propositions, you’re in good stead.
In some cases, and this is no exaggeration, it’s the difference between a purchase being possible and not. We’ve had occasions when we’ve been speaking to a client in that new build space, where perhaps a client’s a bit disheartened that they can’t afford a certain property.
The mortgage is just beyond them. We then position JBSP in their mind – it’s something that a lot of people didn’t know existed. After a quick conversation with a family member, they’re now able to buy.
That’s where the advice part really comes in. There are different calculators from a mortgage point of view and it can absolutely be the difference between you buying that property or not. That’s the potential to be gained from good advice.
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