Buying with Others: The Lender Can Ask You for 100% of the Debt

Camille and her sister Éloïse wanted to buy a house together. Camille had a strong income and a spotless credit file. Éloïse had a more modest income, an existing car loan and a late payment in her past. Their plan was simple: split the payments evenly, and each would own half. There was one question they hadn’t asked: what happens if one of them can’t pay anymore?

Here, each person is a full buyer. That’s different from a relative helping someone qualify, a situation we explain in our article on co-signers and guarantors.

When several people buy together, the lender adds up everyone’s income and debts to calculate the debt ratios (GDS and TDS, explained in our borrowing capacity article). Each person’s income helps you qualify, but Éloïse’s car loan counts in the calculation just as much as Camille’s salary does. Each person’s credit file is also reviewed, and a weaker file on one side can weigh on the whole application.

This is the point most group buyers discover too late. In a joint mortgage, the co-borrowers are jointly and severally liable: the lender can claim the full debt from any one of them, regardless of how you split things among yourselves. If Éloïse lost her job and stopped paying, the bank would turn to Camille for the full payment, not just her half. That debt also appears on each person’s credit file and counts toward their own future borrowing capacity.

What shaped our recommendation for Camille and Éloïse: we explained that their 50/50 split only mattered between the two of them, never in front of the lender. Before committing, they met with a notary to draft an indivision agreement, which sets out who pays what, what happens if one wants to sell her share, and how the other can buy it out.

The loan says nothing about your rights toward one another. In Quebec, when several people buy together, they become undivided co-owners: each owns a fraction of the whole property. The Chambre des notaires du Québec recommends a written indivision agreement, published in the land register so that it can be enforced against third parties. It can cover expense sharing, administration rules, a right of first refusal if someone wants to sell their share, and the duration of the agreement (to be renewed every 30 years).

We’re mortgage brokers, not notaries or lawyers. Drafting an indivision agreement and its legal consequences are a notary’s job. This article is about financing.

Buying with others can work very well, as long as each person understands what they’re committing to. Our team can assess your application as a group and explain what the lender will look at. Let’s talk it through together. As you probably already know, our services are free.