Buying a home as a couple? Expert says don’t skip these 7 crucial questions

26 September 2024


Nothing says commitment like buying a home with your significant other, but according to an expert at Mortgage Brokers, more homebuyers are purchasing property with a partner without first discussing their finances or future goals.

“It’s easy to get swept up in the excitement of homeownership, but this decision demands serious thought. Make sure you’re both ready for the financial commitment and the what-ifs,” says Mortgage Brokers Home Loans Expert, Shaun McGowan.

Source: provided. Caitlin Bampton, 35, Tarragindi QLD.

Caitlin Bampton, who parted ways with a partner after buying a home together in Tarragindi, Brisbane, said couples should have honest conversations about their long-term goals and what would happen to the property if the relationship ends. She admitted that being left to manage a mortgage on her own was a challenge she wasn’t prepared for.

“I was left with the mortgage, rates, water, and the cost of renovations and preparing the property for sale. I contacted the bank to explain the situation, and they told me that as long as the mortgage was repaid, it didn’t matter whether both parties contributed equally. I was able to switch to interest-only repayments during that time to reduce my repayments,” she said.

“We had always agreed to split everything 50-50. Aside from jointly paying the mortgage (plus a small buffer), our other accounts were separate. The items we did buy together were already discussed beforehand regarding who would keep what in case of a separation.”

“I think there needs to be difficult conversations early on about what happens when a change of circumstance occurs whether that be raising children, losing a job or breaking up. There needs to be clarity about who pays for what and whether joint accounts are best for the relationship. I’d also suggest seeing a lawyer to figure out all the options upfront and what can be legally binding.”

To help couples navigate joint homeownership, Mortgage Brokers has rounded up 7 must-ask questions before buying a home together.

1. What’s our budget for a home?

Have you both agreed on a budget and what you’re comfortable paying for a house? It’s important to factor in your combined savings, income and future expenses.

“A mismatch in budget expectations can cause tension if one person feels the other is pushing for a home that’s too expensive,” says Shaun.

“Budgeting isn’t just about whether you can repay your mortgage today. It helps you plan for life’s big expenses like having kids, travel, or unexpected emergencies. By setting a clear budget upfront, you avoid being stuck in a situation that limits your future financial choices.”

2. How will we split the costs?

Will both partners contribute equally to the deposit, mortgage repayments, and ongoing expenses (e.g. rates, utilities), or will contributions be based on each person’s income? For example, if one partner earns more than the other, they may offer to cover a larger portion of the mortgage costs to reduce financial pressure on the lower-earning partner.

“The way you split costs can affect property ownership. If contributions aren’t equal, it’s important to record ownership percentages and ensure this is legally documented to avoid disputes later, like if you break up or sell the property,” says Shaun.

3. What’s our 5-year plan with this home?

Whether you see it as a short-term or long-term investment, a stepping stone to a bigger home, or a place to start a family, defining your goals for the property from the outset can help you avoid headaches down the road.

“Look at any property through the lens of both your present and future goals. Whether you plan to raise a family, sell to buy something bigger or keep it as an investment, being clear about your goals from the start will help you avoid financial setbacks and missed opportunities” says Shaun.

4. How will we handle financial changes?

Financial changes happen, so it’s important to have a plan for handling them. If one partner loses their job or works reduced hours, or unexpected costs like medical bills pop up, have a contingency plan for how you’ll manage those financial challenges.

“Consider setting up an emergency fund that both partners contribute to regularly. It acts as a financial lifeline when unexpected costs or income drops hit, allowing you to cover costs without putting undue pressure on either partner,” says Shaun.

5. What are our credit scores & financial history?

Understanding each other’s credit score and financial history is essential because lenders will consider these factors for your joint mortgage application.

“Do you know your partner’s credit score? Most people don’t. And here’s the kicker — a poor credit score could result in a higher interest rate on your loan or worse, reduce your chance of getting the loan altogether. Add in any hidden debts or financial baggage, and your borrowing capacity could take a serious hit,” says Shaun.

6. What are our lifestyle preferences?

Discuss your lifestyle preferences to ensure both of your needs are considered. It’s important to agree on essential factors like location, the size of the home, and its proximity to work, family, and amenities.

For example, one partner may prioritise being close to family or near good schools, while the other might focus on living close to work or having access to public transport. Similarly, you’ll need to align on the type of home — whether you prefer a modern apartment, a house with a backyard or pool, or something else entirely.

“By having these conversations early, you can avoid potential disagreements and ensure that both of your lifestyle needs are met when making such a major investment,” says Shaun.

7. What happens if we break up?

When buying a property with a partner, it’s important to consider what would happen if your relationship changes or you decide to part ways. How will you manage the property? Will one partner buy out the other’s share, or will you sell the property and split the proceeds?

“Relationships can change, and if they do, you don’t want to be caught in a messy legal or financial battle over property. Having a crystal-clear agreement in place from the start is non-negotiable,” says Shaun.