Adding son as joint owner in a property and him taking on remainder of mortgage

Son is currently renting. We were thinking of a way to try and help him out by helping him get onto the mortgage ladder.

Hubby and I own a house that we own jointly and let out and we have  £55k left on the mortgage, the  house is worth about £130,000.  The house is currently on a buy to let mortgage with tenants living there. The tenants are planning on leaving. We were considering asking son to move in but rather than him pay us rent we would like him to take on and pay the remaining mortgage to help him start building up some equity.

 With that in mind would we be able to add our son to the ownership so we still own 50% of the property between me and hubby, (ie the majority of the equity we already have in the property) and he then would 'own' with a mortgage the other 50% and moves into the property on and pays off the remaining amount  (about 55K) so he would only need to take on a small mortgage rather than a mortgage for the full £130k.  If in the future he was to  sell the property, we would then be paid back our 50% share. Or if he met someone that wanted to move in with him together they could buy out our share and take on a bigger mortgage themselves. Is that something that would be possible?
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  • kingstreet
    kingstreet Posts: 38,604
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    No. Ownership and mortgage have to match so all three of you would need to be borrowers if you are/to be owners. Only way he can be sole owner and borrower is if you gift the remaining equity to him but then he won't be legally obliged to pay you back on sale.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Why not just sell and gift him a deposit contribution from the equity? That way he gets to choose his first purchase rather having a choice of one house.

    Don't forget you will probably have a CGT liability whichever way you go. 
  • 13Kent
    13Kent Posts: 1,177
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    Thanks for that reply. Could we add him to our mortgage so that the 3 of us were jointly responsible for the mortgage then?
  • mortgageFTB
    mortgageFTB Posts: 235
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    edited 20 November 2023 at 11:46AM
    13Kent said:
    Thanks for that reply. Could we add him to our mortgage so that the 3 of us were jointly responsible for the mortgage then?
    You can’t just add someone to a mortgage. You’d need to remortgage with him as an applicant on the new mortgage.

    Does he want to give up his FTB stamp duty and other benefits with this whole plan?

    What happens if he wants out in the future? Are you happy to sell the property if so? Do you have high enough income to remortgage again in the future to remove his interest?
  • 13Kent
    13Kent Posts: 1,177
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    Why not just sell and gift him a deposit contribution from the equity? That way he gets to choose his first purchase rather having a choice of one house.

    Don't forget you will probably have a CGT liability whichever way you go. 
    Because I'm not sure he'd be able to afford to take on the full amount of the mortgage and we do want to keep some of the equity for ourselves just in case we need it in the future 
  • kingstreet
    kingstreet Posts: 38,604
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    You may be able to do a transfer of equity you add him to the ownership and the mortgage. You will need to ask your lender how to go about this.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • silvercar
    silvercar Posts: 46,736
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    13Kent said:
    Why not just sell and gift him a deposit contribution from the equity? That way he gets to choose his first purchase rather having a choice of one house.

    Don't forget you will probably have a CGT liability whichever way you go. 
    Because I'm not sure he'd be able to afford to take on the full amount of the mortgage and we do want to keep some of the equity for ourselves just in case we need it in the future 
    The first problem can be solved by taking a sole proprietor, dual (or triple) borrower mortgage. That way your son would own the property on his own but you would all be on the mortgage.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • ACG
    ACG Posts: 23,613
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    With him going on this property, it might affect other things down the line - stamp duty, any first time buyer benefits such as Lifetime ISAs (LISAs). 
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • kingstreet
    kingstreet Posts: 38,604
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    silvercar said:
    13Kent said:
    Why not just sell and gift him a deposit contribution from the equity? That way he gets to choose his first purchase rather having a choice of one house.

    Don't forget you will probably have a CGT liability whichever way you go. 
    Because I'm not sure he'd be able to afford to take on the full amount of the mortgage and we do want to keep some of the equity for ourselves just in case we need it in the future 
    The first problem can be solved by taking a sole proprietor, dual (or triple) borrower mortgage. That way your son would own the property on his own but you would all be on the mortgage.
    I interpreted the OP as wanting JPSB, rather than JBSP with them off the mortgage but not the ownership.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • MWT
    MWT Posts: 9,108
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    13Kent said:
    The house is currently on a buy to let mortgage with tenants living there. The tenants are planning on leaving. We were considering asking son to move in but rather than him pay us rent we would like him to take on and pay the remaining mortgage to help him start building up some equity.

    Also going to have to deal with the problem of it being a BTL mortgage which is unlikely to be regulated and hence not possible to have close relative living there...

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