Mortgage basics
Buying in co-ownership: securing the loan, the shares and the exit
Buying jointly in co-ownership: what the bank requires, how to set fair shares, and how to exit while the loan is still running.
Buying in co-ownership means each person holds a share of the property, as stated in the deed, while each remains liable for the entire loan if it is signed with a joint and several liability clause. The bank aggregates the income and expenses of all purchasers. The shares are aligned with what each person actually finances, and leaving the property does not release anyone until the bank has signed the release from joint liability.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- Each purchaser holds a share of the entire property, as stated in the deed; this determines ownership, not the debt owed to the bank.
- The loan is generally signed by all parties with a joint and several liability clause: each co-borrower is liable for the full instalments, not just their share.
- The income and expenses of all co-owners are aggregated for the calculation of the debt-to-income ratio: the vulnerability of one person weighs on the joint application.
- The co-ownership agreement is not mandatory, but it organises what the purchase deed does not specify: decisions, expenses, occupation, and exit.
- Leaving the property does not release anyone: until the bank has signed the release from joint liability, the departing co-owner remains liable for all instalments.
In co-ownership, each person holds a share of the property but, with the usual joint loan, owes the entire debt. Set the shares and the exit strategy before signing: this is one of the fundamental rules of home lending, whether you are a couple, friends, or family.
Buying in co-ownership: what each person actually owns
Each buyer holds a share of the entire property, recorded in the deed. This determines what each person receives from a resale, not what they owe the lender.
For couples: see joint borrowing capacity.
The joint loan: each person owes the whole
Generally, a single loan is signed by all parties, with a joint liability clause. The lender can demand all instalments from any one of you.
Incomes and expenses are added together: the debt-to-income ratio is calculated on the group.
Il se calcule sur l'ensemble des co-emprunteurs : toutes leurs charges de crédit rapportées à tous leurs revenus retenus. Un crédit en cours chez un seul d'entre eux pèse donc sur le dossier commun.
- En vigueur depuis le
- Source
- Décision D-HCSF-2021-7, art. 1er — Légifrance
- A fragile profile affects everyone: probationary period, default, ongoing credit.
- The debt follows you on any other project undertaken alone.
- The insurance shares protect the survivor from an excessive debt.
Fair shares, aligned with what each person pays
| Situation | What the deed should reflect |
|---|---|
| Equal contributions, repayment by half | Equal shares |
| A higher contribution from one party, repayment by half | A larger share for the one who contributes more |
| Equal contributions, but one repays a larger share of the loan | A share that accounts for the expected repayment effort |
| A parent who helps without wanting to be an owner | Not a share: a gift or a family loan, written as such |
Pay from traceable accounts and keep the invoices for works paid for by one person.
The co-ownership agreement: the rules of the game, in writing
Optional, drafted by the notary, it specifies who decides, who pays, and how one exits. It must be in writing, under penalty of nullity, and must list the assets and the shares; for a property, it must be registered.
Without it, selling or mortgaging requires the agreement of all parties, and partition can always be requested, unless suspended by court order or by agreement. It regulates:
- The charges: instalments, council tax, service charges, major works.
- Occupancy: who lives there, and what they owe to the others.
- Valuation in the event of exit: a joint expert or two valuation opinions.
- The right of first refusal among co-owners, and its time limit.
- The fate of the loan if one party leaves before the end.
A multi-party rental project? Compare with the limited liability company.
Exiting co-ownership with a loan in progress
- Sell. The price first repays the outstanding capital; the balance is shared according to the shares.
- Buy out the other party's share. You pay a balancing payment and take over the loan alone, if the lender releases the other party after a new review. See the buyout of the balancing payment.
- Transfer your share to a third party. Rare: the other co-owners may pre-empt, and the lender must accept the new co-borrower.
Leaving the property releases you from nothing: without a release signed by the lender, you remain liable for all instalments.
Before the preliminary sale agreement: four points to settle
- The table of contributions and repayments, with the origin of each sum understood.
- Each profile read as the lender will read it.
- The exit scenario: can one party take over the loan alone?
- The documents of each co-borrower, gathered in one go.
I am a mortgage intermediary working under mandate (fees). A call with all the buyers is sufficient to set everything out.
Create your file: I deal with the lenders.
Sources
Read next
- Mortgage in Lyon: frequently asked questions
- Borrowing as a couple: the true calculation of your joint borrowing capacity, and how to protect each partner Borrowing as a couple: what the bank actually adds up, what it examines next, and how to protect an unequal contribution in the deed.
- Buyout of the equalisation payment and release from joint liability: keeping the property and taking over the loan alone Equalisation payment, transfer duty, bank consent, deadlines: what you need to arrange to keep the property and take over the loan alone after a separation.
- Mortgage insurance share: 100/100 or 50/50, how to choose as a couple What remains due to the survivor depending on the chosen split, the overlooked effect on sickness benefit, and a decision grid based on the income gap.
- Financing a purchase through an SCI, under IR or IS: what the bank truly requires Mortgage through an SCI: partners’ joint guarantee, debt-to-income ratio, current-account contribution, security. What secures the deal, under IR or IS.
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