Can I add my spouse to my mortgage without refinancing?

Nothing spells ‘togetherness and trust’ like sharing a loan, but adding someone to a mortgage isn’t as easy as saying “I do”.

There can be times when it may seem like a good idea to formally add someone to a mortgage. You and your partner may have been sharing a home you own, for example, with your other half chipping in to help with the loan repayments.

Or, you may have recently tied the knot, and you and your new husband or wife would like to officially combine your finances.

In both cases, you may want to formalise the situation and have your partner or spouse added to the mortgage.

However, adding someone to a mortgage involves more than a quick call to your lender.

Adding someone to a mortgage

Mortgage Choice broker in Marrickville, Chantelle Rangel, explains, “if you are adding someone to the loan, lenders will need to re-asses serviceability to ensure you are both able to service the loan.”

This is because home loan lenders are required to comply with responsible lending legislation, and be sure the loan is suitable for your partner. This being the case, your lender will check that your spouse or partner also meets the criteria that you had to in order to secure loan approval in the first place, taking into account factors such as income, living expenses and credit record.

The upshot, as Ms Rangel notes, is that “this may be a good opportunity for you to look at refinancing.”

If you’re interested in finding out about your eligibility for refinancing your home loan and what deals may be available to you, try Canstar’s Home Loan Eligibility Checker tool for free.

Check Refinance Eligibility

Refinancing to add a spouse to a mortgage

The idea of refinancing just to add your other half’s name to a home loan can sound like a hassle – and it can have drawbacks that we’ll look at shortly. However, refinancing can also be an opportunity to seek a lower rate or improved loan features. Our Refinance Home Loan Comparison tool makes it easier to compare refinance home loan rates and features.

A number of lenders also offer cashback payments that can make it even more attractive to refinance your home loan, but it’s important to also look at the overall costs and benefits of a loan rather than applying just to get a special deal.

The benefit of adding a spouse to the mortgage

Assuming your partner is approved by a lender, adding them to your mortgage can have the potential benefit of boosting your borrowing power. And the process of refinancing can be a way to tap into home equity if you want to free up funds for something like home renovations.

The downside of adding a spouse to your mortgage

As part of adding someone to a mortgage, you may also need to have the title deeds of the property altered to include your spouse or partner.

Your lender will likely require this, but it also makes sense from your partner’s perspective. After all, why would they agree to take on half the debt without the backing of a stake in the home?

Ms Rangel notes: “You may want to seek the advice of a solicitor or conveyancer to understand the legal requirements regarding the property title. If you are required to pay stamp duty, a conveyancer will be able to provide you with advice regarding any possible exemptions.”

Should you add someone to your mortgage?

The upshot is that you will typically only be able to add a spouse to your mortgage by refinancing your home loan. That’s not necessarily a bad thing. However, adding someone else to your mortgage – and in particular, the title deeds to your property – is a step to think through carefully.

No matter whether you opt for ownership through joint tenants (where you jointly own the whole property) or tenants in common (where each of you owns a share of the property) you are giving up full rights to the property.

That said, if the relationship breaks down, your former partner may be able to make a claim on the property regardless of whether their name is on the title deeds and potentially even if they haven’t made any contributions to your home loan repayments.

Cover image source: Ivanko80/Shutterstock.com