Can I add my partner to my mortgage?
You can generally add your partner to your mortgage as a co-borrower, but they’ll need to be assessed by your lender to ensure they can also afford the loan. This generally means you’ll need to refinance your home loan.
This is due to lenders in Australia being required to comply with responsible lending legislation, ensuring the loan is also suitable for your partner.
Why might you add your partner to your mortgage?
Buying a property is a significant investment, and managing mortgage repayments solo can be a financial strain. If you bought your home before meeting your partner or your joint financial circumstances have changed, adding your spouse to an existing mortgage might make sense.
Adding a second income can boost your overall borrowing power and potentially lower your household debt-to-income (DTI) ratio. This can help increase your financial flexibility if you’re planning to apply for another loan, or you simply want to shore up your household finances.
Beyond the finances, there might be emotional reasons to add your spouse to a mortgage. After all, sharing is caring.
How does adding a partner to your mortgage work?
You’ll need to contact your lender and request to add your partner to your mortgage. Since this means your home loan contract must change, it generally requires you to go through the refinancing process—even if you walk away with the same home loan product in the end.
During that process, your lender will then check if you and your partner meet its criteria, taking into account both of your incomes, living expenses, any existing debts, and your credit histories.
You and your partner will be asked to supply updated information like payslips, bank and credit card statements, and details on any assets or debts you each have.
Bear in mind that, depending on the situation, the names on a property’s title might need to match the names on a mortgage. If you’re unsure or time poor, it could be worthwhile reaching out to a mortgage broker or your legal representative for expert help.
You may also be charged fees, even when refinancing with your current lender to a similar loan product. It’s recommended you talk to your chosen lender about any potential fees before proceeding.
Can I add my partner to a mortgage when refinancing to a different loan or lender?
You can also generally add your partner to your mortgage when refinancing your home loan to another product or lender, which can offer additional benefits. In this circumstance, you will both need to go through the same credit assessment you did when initially taking out your home loan.
But the idea of refinancing just to add your other half’s name to your home loan may come with some drawbacks like refinancing costs. However, refinancing can also be an opportunity to find a lower rate or improved loan features. If you’re interested in refinancing, you can compare refinance home loan rates and features with Canstar.
A number of lenders also offer cashback deals when refinancing that may help cover some of the costs, but it’s important to also look at the overall costs and benefits of a loan product, including its interest and comparison rates, fees, and features, rather than just a special deal.
Pros and cons of adding your partner to your mortgage
Pros
- May help boost your borrowing power, as having two income sources generally increases how much you can afford to repay
- If you’re refinancing, you may also be able to tap into your home equity to free up funds for something like home renovations
- Refinancing can also see you walk away with a lower rate or more suitable home loan features
Cons
- You may be charged fees when refinancing, even with your current lender
- You might also need to add your partner to the property title, which can come at a cost and require the expertise of a legal professional
- You may put yourself at risk if your partner becomes unable to meet their financial obligations, potentially leaving you responsible for larger repayments
Should you add someone to your mortgage?
Adding someone to your mortgage is a personal decision and can have financial implications, especially if your new co-borrower falls into financial hardship. Risks and rewards may also depend on whether you plan to add your partner to your property’s title as well.
No matter whether you opt for co-ownership through joint tenants (where you jointly own the property) or tenants in common (where each of you owns a share of the property) you’re giving up a portion of your rights to the property when adding someone to the title.
That said, if the relationship breaks down, your former partner may be able to make a legal claim on the property regardless of whether their name is on the title, and potentially even if they haven’t made any contributions to your home loan repayments. That’s why it’s recommended you talk to a legal professional before adding someone to your mortgage or property’s title.
