Splitting a purchase with a sibling or friends can halve the deposit problem and get everyone into the market years earlier. It can also weld your finances to someone else’s life plans. Here is what the structure really involves.
Joint tenants vs tenants in common
Joint tenants own the property equally and, if one dies, their share passes automatically to the others; it suits couples. Co-buyers who are not partners almost always choose tenants in common, where each person owns a defined share (50/50, 60/40, anything) that they can leave in their will or, subject to agreement, sell.
The part nobody warns you about: the loan
Most lenders make every borrower jointly and severally liable for the whole loan, not just their share. If your co-buyer stops paying, the bank looks to you for 100%. Worse, some lenders then count the entire debt against you when you later apply for your own place, while only counting your half of the rent. A few lenders offer "common debt reducer" style assessments that fix this; choosing one of them is half the strategy.
Put it in writing before you buy
- A co-ownership agreement: shares, who pays what, what happens if someone wants out, dispute process.
- An agreed exit valve: right of first refusal for the others, and a timeline to sell if nobody buys the share.
- Separate legal advice for each party, and a conversation about wills and life insurance.
When it works well
Co-ownership shines when everyone shares a horizon (say, hold for 7 to 10 years), keeps buffers, and treats the agreement as binding. It struggles when it is a handshake between optimists. Nathan can structure the lending so one person’s exit does not force everyone’s.