Can Two Friends Buy a House Together on Loan?

So you've got a friend you trust, the dream of owning a place, and solo prices feel like a bad joke. Is teaming up actually doable? Short answer: yes, most banks and lenders will let two friends get a mortgage together. The catch is everyone on the loan has to qualify—so your friend's late payment habit or that blip on your own credit report? Both matter. Lenders add up your incomes and debts. You both get your finances poked at and judged together.

The bank doesn't really care if you're married, related, or just best buds; what matters is that you guys can make payments and won't ghost when things get tough. But paperwork gets heavier. That means joint mortgage documents, clear proof of income, and a whole lot of questions up front. It's totally normal to feel awkward talking about money with friends, but this is one time you can't avoid it. If anything, over-communicate: who pays what, who owns what percentage, how you'll split bills. Write it all down. You'll thank yourself later when life throws its curveballs.

• Getting Approved: Can Lenders Deal with Friend Co-owners?
• How to Split Costs and Ownership
• Mortgages: Who's Responsible If Things Go Wrong?
• Friendship vs. Legal Agreements
• Exit Plans and What If Life Changes
• Tips for Keeping Your Friendship (and Finances) Intact

Getting Approved: Can Lenders Deal with Friend Co-owners?

Most banks in the UK—and many in the US and Canada—have no rule that says you need to be family or married to get a joint mortgage. A decent number of home loans in cities like London and Toronto are now going to friends teaming up. Lenders just want their money back, so they’ll check your combined credit scores, debts, and income the same way they would for a couple.

Here’s the deal: both names go on the loan, and the lender looks at the risk for shared ownership. If one of you has shaky credit, expect the loan to get pricier, or a possible rejection. The bank does a hard check on both of you—background, employment, credit history, the works. It doesn’t matter who makes more or less. Both parties are equally liable for 100% of the mortgage, not just "their half." If one of you flakes, the other is on the hook for the whole thing.

Want to know what lenders care about? Here’s a quick list:

• Credit score (usually 650+ is considered decent, but higher is better)
• Debt-to-income ratio (most want this below 43%)
• Steady employment and proof of income (payslips or tax returns)
• Deposit/down payment size (aim for at least 10%—20% gets better rates)

Check out this sample table from a 2024 UK lender’s criteria for joint buyers:

Pro tip: Get a "Decision in Principle" (or pre-approval) before you even start house hunting. It says a bank is willing to loan you both a specific amount, assuming nothing funky shows up when they do the full check later. It’s expected by estate agents these days, and makes your offer way stronger.

How to Split Costs and Ownership

The biggest thing that trips up friends joining forces is deciding how to fairly divide money and, when it comes to it, the actual bricks and mortar. The good news: the rules aren't set in stone. You can split costs and ownership 50/50 if you're both putting in equal cash, but life is rarely that even. Maybe one of you has a bigger paycheck, or someone’s helping with a bigger down payment. That’s fine—so long as you agree in writing.

There are two main ways to hold ownership: joint tenancy (everything is split evenly, and each gets equal say and inheritance rights) and tenants in common (you each own a percentage, not always equal, and you can pass your share to someone in your will). Most friends choose tenants in common because it’s flexible. If one person ponies up 70% of the deposit, they can own 70% of the home, and it’s written into the deed.

Every little cost counts—far more than just the deposit and monthly mortgage. Here’s what often gets missed:

• Legal fees and stamp duty
• Home insurance
• Repairs and maintenance (hello, surprise boiler breakdowns)
• Property taxes or council tax
• Furniture and shared appliances

If you want a concrete way to divide costs, sit down and list each one together. Many friends open a dedicated joint account for all house-related expenses. Set up standing orders to feed in your agreed shares—no chasing, no awkward reminders.

Need some numbers? Recent data from Habito’s survey (2024) showed that pairs of friends who bought together typically split the deposit and monthly payments 60/40 or 70/30, according to who had the bigger contribution. And don’t think lenders get twitchy about uneven splits—they just care that the total bill gets paid every month.

One last thing: formalize everything with a “declaration of trust” or co-ownership agreement. It lays out exactly who owns what. Without it, you’re stuck with default legal rules, which rarely work in your favor if there’s a dispute. Work this out before you even set foot in your new place—your shared ownership will be way less stressful for it.

Mortgages: Who's Responsible If Things Go Wrong?

This is where things get serious. When two friends sign up for a joint mortgage, the bank doesn't split responsibility down the middle—they expect both of you to pay the full loan if one person bails. That means if your friend loses their job or just vanishes, the bank will chase you for 100% of the payment, not just your half. It's called "joint and several liability." It's not optional. It's standard for pretty much all shared ownership homes with loans.

If payments slip, both of your credit scores take a hit, even if it wasn’t your fault. Missed payments can tank your credit for years and make it tough to get any loan in the future. Repossession happens as a last resort—but both of you end up with the damage. This is why it’s risky to go in with someone unless you trust they’re reliable with money. Friendship is great, but the bank cares about payment, not feelings.

To protect yourself, consider making a plan ahead of time. Here are a few tips that actually work in real life:

• Set up a joint account just for the mortgage, and both put your share in before the payment is due. Automation helps avoid awkward reminders.
• Draft a co-ownership agreement with a lawyer that spells out what happens if one person can’t pay or wants to sell.
• Stay honest about income changes or job issues. Surprises are what blow up both finances and friendships.

This stuff is never fun to talk about—but ignoring it makes everything way worse if something goes sideways. Lenders will treat both of you as fully responsible for paying the entire mortgage, so thinking ahead is your only safety net.

Friendship vs. Legal Agreements

This is where things get real. Buying a house with a friend might start out as a handshake deal, but skipping the paperwork is just asking for drama. Friends can fall out, get new jobs across the country, or meet someone and want to move out fast. That’s why you need a legal agreement—no matter how solid your friendship is today.

The standard setup is a co-ownership agreement (sometimes called a deed of trust or a cohabitation agreement, depending on where you live). This lays out who owns what, how you’ll split mortgage payments, utilities, repairs, and what happens if one of you wants out. It should be done by a lawyer, and yeah, it costs a bit up front, but it’ll save you a world of hurt if things get weird down the line.

• Clarify percentages: Are you each putting in 50% to the down payment? Or is someone covering more up front? Spell it out.
• Decide on ownership structure: Joint tenants (where you both own equally) or tenants in common (can split the share any way you want)? It matters. With tenants in common, you can leave your share to anyone in your will—handy if your life changes.
• Plan exits: What if someone loses a job or wants to sell their part? Your agreement should cover how you’ll deal with buyouts or bringing in new people.
• Maintenance and bills: Agree on how you’ll pay for repairs, insurance, and property taxes. Don’t leave this to chance or memory.

Don’t just rely on agreements—talk honestly and openly, even it feels awkward. It's easy to think that a true friendship is enough, but even the best friendships can get tested when money's on the line. Protect yourselves so you can focus on enjoying your shared ownership, not fighting about it.

Exit Plans and What If Life Changes

No one likes to talk about what could go wrong, but trust me, it’s worse if you ignore it. Life happens—maybe one of you gets a new job across the country, falls in love, or just wants out. When two friends buy a home together, you need an exit plan that actually works in real life, not just in theory.

The smartest move? Get a co-ownership agreement drawn up by a lawyer. This isn’t just a formality. It spells out what happens if someone wants to leave, can’t pay, or even passes away. About 70% of joint home ownership issues come from not having this stuff sorted out up front.

• How will you decide on selling? Is it unanimous or can one push the other into it?
• If one person wants out, can they force a sale, or do they have to offer to sell their share first?
• How do you split any profit (or pay off debt) when it sells?
• What if one can’t pay their part for a while—do you cover them or start legal steps?

Don’t just guess at the numbers, either. Agree on a buyout formula (like getting a couple of estate agents to value the place and splitting costs). Put it in writing!

Here’s the thing: a shared ownership setup needs flexibility. Some friends agree to check in every year to see if their goals still match up. More often than not, early planning saves the friendship and your finances if things change. And don’t just sign and forget—revisit your agreement if big things happen, like new jobs or relationships. Clear exit plans keep everyone sane.

Tips for Keeping Your Friendship (and Finances) Intact

Owning a house with a friend isn't like splitting the bill at dinner—it’s more like running a small business together. If you want to keep things smooth (and stay friends), you’ll need solid ground rules and total honesty. A well-run shared ownership situation can work, but you can’t just hope for the best. Here’s the real stuff that helps you keep both your money and your friendship safe.

• Get Everything in Writing: Sounds basic, but most people skip this and regret it. Decide on who owns what share, how costs are split, and what happens if someone wants out. A co-ownership agreement is a must.
• Set Up a Joint Account: Pay your mortgage and shared bills from a single account. It makes tracking stuff easier and avoids the “I thought you sent it” drama.
• Schedule Monthly Money Talks: Pick one day a month to check the bills, savings, repairs, and who’s paid what. Keep it casual, but be open about everything. This prevents petty fights from blowing up.
• Plan for the Unexpected: Life happens. One of you could lose a job, get married, or want to move out. Agree on what you’ll do if things change. Who can buy the other out? Will you sell together?
• Use a House Maintenance Calendar: Google Calendar, a whiteboard, or even a checklist on the fridge—whatever works. Schedule who does what so chores and repairs don’t get ignored or become one person’s burden.

How common is it for friends to succeed at this? There’s some hard data—a recent UK survey found that co-buyers who set up a formal agreement up front are 60% more likely to avoid major disputes than those who don’t bother.

Bottom line? Keep it organized, stick to the plan, and don’t sweep money or chores under the rug. Open chat and clear boundaries go a long way toward making your shared home a win—not a disaster story.