Joint housing loan

When buying a home becomes topical and you are about to move in a joint flat or house with your partner, you must consider whether to take out a loan together or alone. It may be profitable to buy the home together especially if you are looking for a place that is more expensive than usual.

In which situations a joint housing loan is the best solution and when are separate loans a smarter choice?

A joint housing loan is often the cheaper solution: monthly fees are always payable on a supplementary loan, whereas in the case of a joint loan you only have pay the fees of one loan. A joint housing loan is often the best solution if the parties are in a similar situation as regards their home savings, income level and repayment ability. You can also take out a housing loan together with your parents, for example. In any case, the easiest way of avoiding any disputes is to take out a housing loan for both parties.

When should the housing loans be separate?

If only one party of the couple planning to take out a housing loan has saved in an ASP Account, the home-saving loans must be raised separately. This also applies when the parents of a young home buyer are ready to only guarantee the housing loan of their own child. Separate housing loans are a wise option also when the home savings of the parties are of different sizes: the holder of the smaller home savings account is also entitled to a smaller loan.

A couple’s joint housing loan

A joint housing loan is a usual choice for cohabitants and marital spouses. If a joint housing loan has been taken out but the relationship ends up in a split, the joint housing loan will not cause any more problems than the supplementary loans. One of the borrowers may assume the repayments of the rest of the loan and thus buy the other party out, or if neither party wants to stay in the flat or house, the remaining debt can usually be set off by selling the home.

Joint housing loan easily

It is worthwhile to draft a detailed repayment schedule for a joint housing loan to avoid any ambiguity. A good practice is to open a joint household account to which each party can transfer money and check from the account details whether a repayment has been made as agreed. Complications may occur if the accounts are separate and the other borrower encountering payment difficulties tries to cover them up.

A joint housing loan allows a couple to decide on the division of the monthly payments between themselves as long as the total repayment of the housing loan is made within the schedule agreed on. This does not usually cause any problems, as in a break-up the rest of the loan repayments can be made by selling the home. We are pleased to help you find the housing loan solution that will suit you best.

Ask us about buying your first home

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