Buy a House Together? Discover Relief with Loans

Imagine owning a home with your best friend. It seems like a dream—sharing the financial burden, building equity, and having a place to call your own. But can two friends really buy a house together on a loan? With the right information and guidance, it’s not only possible, but it might be one of the smartest financial decisions you can make. Let's explore how you and a friend can navigate the Australian property market and secure a home loan together.

Understanding Joint Home Loans

Joint home loans are a viable option for friends who want to buy property together. Essentially, a joint home loan allows two or more people to share the responsibility of a mortgage. This can be a strategic way to enter the property market, especially as housing prices continue to rise. In 2026, the median house price in major Australian cities like Sydney and Melbourne has surpassed $1 million, making it increasingly challenging for individuals to purchase property alone.

With a joint home loan, both parties are equally responsible for the mortgage repayments, which means both credit scores and financial situations will be evaluated. This can be advantageous if one friend has a stronger financial profile, potentially securing a better interest rate for the loan.

Interest Rates, Requirements, and Options

Interest rates for joint home loans can vary widely, typically ranging from 6.49% to 12% depending on the lender, the borrowers' credit scores, and the loan amount. As of 2026, most Australian banks and lenders offer competitive rates, but it’s crucial to compare your options to ensure you get the best deal. Esteb and Co, with access to over 83 lenders, can help you navigate these choices.

Eligibility criteria for a joint home loan generally include:

• Both applicants must be over 18 years of age.
• Both must have a stable income and employment history.
• A good credit history is essential, as it affects the interest rate and loan approval.
• Combined income and assets will be evaluated to determine the borrowing capacity.

Options for joint loans include fixed-rate loans, variable-rate loans, and split loans, each with its own advantages and disadvantages. Here’s a brief comparison:

Steps to Buying a House with a Friend

Here are practical steps to guide you through the process of buying a house with a friend:

1. Assess Financial Compatibility: Discuss your financial situations openly. Consider creating a joint budget to understand how much you can afford together.
2. Choose the Right Property: Decide on the type of property, location, and budget. Consider both of your needs and long-term goals.
3. Consult with Experts: Engage with mortgage brokers like Esteb and Co to explore loan options from their extensive panel of 83+ lenders.
4. Get Pre-Approval: Once you’ve narrowed down your options, apply for pre-approval. This will give you a clear idea of your borrowing capacity.
5. Formalise Agreements: Draft a co-ownership agreement with legal advice to outline each party’s responsibilities and what happens if circumstances change.
6. Make an Offer: With pre-approval and a clear agreement, you can confidently make an offer on your chosen property.
7. Finalise the Loan: Complete the loan application process, ensuring all documents are in order for the final approval.
8. Settlement and Moving In: Once the settlement is complete, you can move into your new home together.

Expert Tips and Considerations

Buying a house with a friend requires careful consideration and planning. Here are some expert tips to ensure a smooth process:

• Communication is Key: Regular and open communication can prevent misunderstandings and ensure both parties are on the same page.
• Plan for the Future: Discuss potential life changes that might affect your living situation, such as career changes or relationships.
• Be Prepared for Additional Costs: Budget for additional expenses such as stamp duty, legal fees, and maintenance costs.
• Keep an Emergency Fund: Having savings set aside for unexpected expenses can provide peace of mind and financial security.
• Review Regularly: Periodically review your financial situation and the loan terms to ensure they continue to meet your needs.

Frequently Asked Questions

1. Can we split the mortgage payments unequally?
   Yes, you can agree on an unequal split, but it should be clearly outlined in your co-ownership agreement.
2. What happens if one person wants to sell?
   It's essential to have a plan in place, such as a buyout option, which should be included in your co-ownership agreement.
3. How does joint ownership affect taxes?
   Each owner is responsible for their share of taxes, which should be considered in your financial planning.
4. Will my credit score affect our loan?
   Yes, both credit scores will be assessed, and a lower score could affect loan terms and interest rates.
5. Can we buy a house together if one of us is a first-time homebuyer?
   Yes, but eligibility for first-time homebuyer benefits may vary, so it’s best to consult with a mortgage expert.
6. Is it possible to add a third person to the loan later?
   Adding a co-borrower later is possible, but it requires lender approval and may involve revising the loan terms.
7. How do we handle disagreements?
   A well-drafted co-ownership agreement and regular communication can help manage and resolve potential disagreements.