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Do banks allow “borrowers of convenience”, where a third party can be brought on as a co-borrower to assist with loan affordability?

Wednesday, July 26, 2017

If the relationship between the borrowers is not spousal, then most banks won’t allow a third party to be brought onto the loan to assist with serviceability, if they are not a joint owner in the property.

These are requirements are the same for parents and children.

Most banks would require each party have at least a 20% ownership share in the property in order for their income to be used to assist with serviceability.

We have access to one lender who on a case by case basis will allow a 1% ownership share, which is great if the third party is worried about land tax or future capital gains implications.