Buying with someone else gets you in years earlier. It also ties you to their financial life in a way most people do not fully register when they sign. Both those things are true, and the second one is manageable — if it is dealt with at the start rather than when something goes wrong.
The thing to understand first
On a joint loan you are each liable for the whole debt, not your half. It is called joint and several liability, and it is not a technicality.
If your co-buyer stops paying, the lender comes to you for the full repayment. If they cannot pay their share, the arrears go on your credit file too. And while that loan exists, most lenders count the entire debt against your borrowing capacity if you later want to buy something of your own.
None of that is a reason not to do it. It is a reason to choose your co-buyer as carefully as you choose the property.
Joint tenants or tenants in common
This is a decision you make on the title, and it matters:
- Joint tenants. You own the whole thing together. If one of you dies, the other automatically takes full ownership regardless of what a will says. Normal for couples.
- Tenants in common. You own defined shares — 50/50, or 70/30 if one contributed more. Each share passes under that person’s will. Almost always the right structure for friends, siblings or anyone contributing unequally.
Your conveyancer sets this up. Say which you want rather than accepting the default.
Write the exit agreement while everyone still gets along
The uncomfortable conversation is much easier now than in eighteen months. A co-ownership agreement, drawn up by a solicitor, should cover:
- Who contributed what to the deposit, and how that is recognised on sale
- How the repayments, rates, insurance and maintenance are split
- What happens if one of you wants out — right of first refusal, how the price is set, how long the other has to arrange finance
- What happens if someone cannot pay their share for a while
- Who decides on major repairs, and how a deadlock gets broken
Most co-ownerships that fall apart do so not because someone behaved badly but because nobody agreed the rules in advance.
What lenders look at
Both incomes count, and so do both sets of debts. One person with a large personal loan or a patchy credit file can pull the whole application down — worth checking each other’s position honestly before you apply, not after a decline.
Government first home buyer schemes have their own rules about co-buyers, and eligibility is usually assessed per applicant. If one of you has owned property before, check what that does to the other’s entitlement before you count on it.
Worth doing, with the paperwork done properly
Plenty of people get into the market this way and it works out well. The ones it works out best for are the ones who spent a few hundred dollars on a co-ownership agreement at the start.
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General information only — it does not take your objectives, financial situation or needs into account, and is not credit assistance or legal advice. Ownership structures and co-ownership agreements are matters for your solicitor or conveyancer. Easy Loan Finance is a Credit Representative (CRN 568863) of Beagle Finance Pty Ltd, Australian Credit Licence 383640.
