Property Share is a simple home loan option that allows multiple people to buy a property together and share the costs, while keeping their finances separate. It’s great for homebuyers and investors looking to refinance or enter the property market sooner.
Let’s break down what Property Share is, the benefits and risks and what you need to consider before applying for this type of loan.
Who is Eligible for a Property Share Loan?
- Available to Individuals, non-trading Companies and/or Family/Unit/Hybrid Trusts.
| Eligible Loan Types | What you can use this loan for | What you can’t use this loan for |
| – Standard Variable Rate home loan – Fixed Rate home loan – Refinance | – Owner occupied or investment property purchase – Home renovations – Consolidation of personal debt – Off the plan purchases – Personal needs – Personal investments | – Business purposes – Bridging loans – Purchase of land – Building and construction loans |
- To qualify for a property share loan, all borrowers must:
- Be owners of the property (no third-party guarantors allowed).
- Guarantee each other’s home loans as security support only.
- Show they can handle the minimum required repayments for their own home loans.
- Get independent legal advice before entering into a Property Share arrangement.
- Sign a Statutory Declaration.
- A maximum of two home loan applications per security is allowed. However each application may have multiple borrowers or multiple loan products (such as a split loan).
The Benefits of Property Share Loans
- Divide property costs as desired; each borrower manages loans and repayments independently.
- Customise home loans to individual needs: choose amount, type, term, and repayment structure.
- Benefits include entering the property market with a smaller deposit and building equity faster.
- Allows investment with multiple parties while keeping finances separate.
The Risks of Property Share Loans
- In a Property Share arrangement, you guarantee repayment of the other borrower’s home loan if they can’t pay.
- If they default, the lender will try to recover the debt from them first.
- As a last resort, the lender may assist in selling the property that secures your loan to repay the debt.
Important Note: Agreeing to be a guarantor and providing a guarantee comes with substantial financial risk. This could mean losing your property (even your family home) or facing significant financial loss. If there’s a default and you must repay the guarantee, it could also hurt your credit score.
Did you know? Each borrower can choose a home loan product that suits their needs. The features, benefits and interest rates of the selected home loan(s) will apply. We will guide you through the differrent options available and find the best fit for your unique situation.
Ready to Explore Your Options and Find Your Dream Home?
Contact us today via our website or on 02 9095 6888 and talk to one of our specialist mortgage brokers who can help you navigate the process of Property Share Loans and find the best approach for your unique situation.