Can you get a mortgage with a friend in Australia?

Yes, you can get a mortgage with a friend in Australia, which can make homeownership more accessible by pooling financial resources and sharing the cost burdens. However, it requires careful financial and legal planning, including setting clear terms for co-ownership and preparing for potential challenges such as one party's desire to sell or changes in personal circumstances.

In Australia, the rising property prices have led some to consider co-buying a home with friends as a viable option. This approach can make homeownership more accessible and financially feasible. However, it also involves navigating complex legal and financial landscapes. This article explores the intricacies of getting a mortgage with a friend in Australia, covering everything from joint ownership types to the steps involved in securing a mortgage together.

Understanding Joint Home Ownership

Definition of Key Terms

  • Joint Tenancy: A form of ownership where each party owns the property equally. If one owner dies, their share automatically passes to the surviving owner(s).
  • Tenants in Common: Each party owns a specified share of the property, which can be unequal. Shares can be sold or bequeathed separately.
  • Co-borrower: An individual who applies for a mortgage along with another person and shares responsibility for repaying the loan.

Types of Joint Ownership

Choosing between joint tenancy and tenants in common depends on the relationship between the buyers and their long-term intentions. Joint tenancy is often preferred by those who want equal shares and responsibilities, while tenants in common allows more flexibility in ownership percentage and estate planning.

Eligibility and Requirements for Joint Mortgages

Financial Eligibility

Lenders assess the combined income and debts of all applicants, which can often improve eligibility for a higher loan amount than if applied individually. However, all parties' credit scores will be scrutinised closely, as one poor credit history can impact the overall application.

Other Necessary Documentation

Prospective co-buyers need to provide identification, proof of income, and detailed legal documents that set the terms of co-ownership, ensuring all parties are protected and obligations are clear.

The Benefits of Buying with a Friend

Financial Benefits

Sharing the deposit, mortgage payments, and home maintenance costs can make homeownership more attainable, whether you plan to live in it or rent it out as an investment property. Additionally, combining incomes increases the borrowing power, allowing access to better properties in more desirable locations.

Social and Lifestyle Benefits

Co-buying can reduce the individual workload associated with managing a property. It also provides a shared living situation that can enhance quality of life through shared responsibilities and companionship.

Risks and Challenges

Financial Risks

One significant risk is the potential complication arising if one party wishes to sell their share or cannot continue to meet financial commitments. Such situations can affect both parties’ finances and their credit scores if the mortgage defaults.

Legal and Relationship Challenges

Without a clear legal agreement, changes in personal circumstances (like one person getting married or wanting to move out) can lead to disputes. The relationship between friends can also be strained by the pressures of joint financial commitments. Even without the pressures of a joint mortgage, friendships can fall apart over time, and a mortgage is a long-term commitment spanning decades.

Preparing to Buy a Home Together

Financial Planning

Friends should budget for initial costs (like deposits, stamp duty and conveyancing costs) and ongoing expenses (such as property taxes, home insurance, strata levies and repairs). It’s also crucial to plan for scenarios like one person wanting to exit the joint agreement.

Legal Preparation

A binding co-ownership agreement is essential. This contract should outline how expenses are shared, what happens if one party wants to sell, and how disputes are resolved. Consulting with a legal professional to draft this agreement is strongly advised and can save lots of potential headache in the future.

Steps to Getting a Joint Mortgage

Choosing the Right Mortgage Product

It’s important to compare mortgage options that are suited to joint purchasers, considering factors like flexibility in adding or removing names and the terms of loan repayment. Using a top mortgage broker is a great way to receive valuable free advice tailored to your specific situation.

Application Process

The process typically involves:

  1. Pre-approval: Both parties should get pre-approved to understand how much they can borrow.
  2. Property Search: Find a property that meets both parties’ needs and budget.
  3. Loan Application: Submit all required documentation and complete the mortgage application.
  4. Closing: Finalise the mortgage and transfer the property title, ensuring both names are on all documents.


Buying a home with a friend in Australia can make property ownership accessible and provide social benefits. However, it also requires careful planning and consideration of potential risks. By understanding the legal and financial implications and preparing adequately, friends can successfully navigate the complexities of joint homeownership and enjoy the journey of buying and owning a home together.

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