One On Title, Two On Loan

One On Title, Two On Loan simply means:

• One person owns the property and is listed on the property title.
• Two people are responsible for the home loan and must make repayments.

This structure is commonly used when one partner is an Australia citizen or a permanent resident, the other partner is either a temporary resident, expat, or non-resident, and they want to avoid paying foreign stamp duty surcharge (which is the main benefit of this structure).

It is a legal loan structure, but it comes with important risks and strict lending rules.Before considering this option, it is essential to understand how ownership and responsibility are separated.

Why Would Someone Use One On Title, Two On Loan?

Foreign buyers in many Australian states must pay an additional foreign stamp duty surcharge when purchasing residential property. If a temporary resident or foreign national is included on the property title, this surcharge can apply.

Placing only the Australian citizen or permanent resident on the title can help you:

• Use both incomes for the home loan assessment
• Ensure the property is legally owned by the Australian partner
• Avoid the foreign surcharge The foreign surcharge may be avoided

This can significantly reduce upfront costs while improving borrowing power.

What Are the Risks of One On Title, Two on Loan?

The primary risk of such a structure is that it carries serious legal and financial implications. The non-owner spouse does not own the property.

So, if you have loan responsibilities but are not on the title:

• You are jointly liable for the debt
• You do not legally own the property
• You are still fully responsible for repayments
• If the relationship breaks down, legal disputes can arise

There are bankruptcy risks associated with this structure as well. For instance, if the non-owner borrower becomes bankrupt:

• The owner may be affected
• Creditors may pursue the property

In addition, future borrowing capacity may be affected.

If the non-owner wants to buy another property later, the existing loan will reduce their borrowing capacity/ Because of these risks, always take legal advice before proceeding.

Who Can Use One On Title, Two on Loan?

To qualify, you must:

• Have a strong credit history
• Be in a spousal or de-facto relationship
• Demonstrate a clear benefit to all borrowers
• Provide a valid reason for choosing this structure

If there is no financial benefit to the person not on title, lenders may treat them as a guarantor instead and decline the structure.

How Much Can You Borrow?

Depending on your situation:

• Minimum loan amount: $50,000
• Maximum loan amount: Up to $1,250,000
• Up to 95% of the property value (including LMI)
• Some specialist lenders may restrict lending to 65% LVR
• Each lender applies different rules, especially for foreign income.

What’s the Lending Criteria For One On Title, Two On Loan?

Lenders apply strict guidelines when assessing this structure.

Loan to Value Ratio (LVR)

Typically capped at 80% LVR for expat or foreign scenarios.

Employment Type

• PAYG borrowers accepted
• Self-employed borrowers accepted
• Companies, trusts and business borrowers generally excluded

Income Assessment

• Income must be translated into English
• Foreign income is usually shaded to 70%
• Converted into Australian dollars using current exchange rates

Credit Reports

• Australian credit report required
• Overseas credit report may also be required

Visa Requirements

• Permanent residents typically require at least 2 years remaining validity

Low Doc Loans

Not available under this structure.

Both borrowers must be on title for low doc loans. Lenders consider this structure too high risk for reduced documentation.

What Are The Pros And Cons Of One On Title, Two On Loan?

Pros

• Access to competitive interest rates
• Borrow up to 95% LVR in some cases
• Potentially avoid foreign stamp duty surcharge
• Increased borrowing capacity using two incomes
• May bypass FIRB approval requirements in certain scenarios

Cons

• Limited lender options
• Interest rates may be higher
• Higher fees compared to standard loans
• Harder to structure for investment properties
• Complex legal risks if relationship breaks down
• Non-owner borrower carries full repayment liability

Fees to Consider For One On Title, Two On Loan

How can a mortgage broker help?

A mortgage broker can help to ensure that the application will be lodged once the criteria has been met. They will do their part in ensuring that the loan goes through as they know the best lenders for the specific situation and the competitive rates that they offer. 

When applying for an Australian mortgage, you will need to provide documentation and evidence. The broker will make sure that you have:

• Copies of personal identification documents (for example: your passport)
• Proof that you qualify under FIRB rules to buy a property
• Proof of legal residence in Australia (if you have it)
• Documents that prove you’re creditworthy (things like a credit check, proof of your wages, bank statements, tax returns for the last three years or an employer’s letter)
• Documents that prove your ability to service the mortgage

Is a permanent resident eligible for this product?

Australian permanent resident visa holders are limited to the following “Acceptable Countries” list. 

• Australia
• Brunei
• Canada
• China
• France
• Germany
• Hong Kong
• India
• Indonesia
• Japan
• Macau
• Malaysia
• New Zealand
• Philippines
• Saudi Arabia
• Singapore
• South Africa
• Switzerland
• United Kingdom
• United Arab Emirates
• United States of America

Will my currency be accepted?

There is a good chance that we will be able to get you approved for a loan if your income is mentioned in the following list of currencies.

• Australian dollar: AUD
• Brunei dollar: BND
• Canadian dollar: CAD
• Chinese Yuan Renminbi: CNY
• European euro: EUR
• Hong Kong dollar: HKD
• Indian rupee: INR
• Indonesian rupiah: IDR
• Japanese yen: JPY
• Macanese pataca: MOP
• Malaysian ringgit: MYR
• New Zealand dollar: NZD
• Philippine peso: PHP
• Saudi Arabian riyal: SAR
• Swiss franc: CHF
• Pound sterling: GBP
• UAE dirham: AED
• United States dollar: USD

Important to note: 

• 100% of your income will not be considered as there will be a certain percentage crunched down due to foreign currency rates
• Acceptable income evidence must be translated into English by an accredited translator and converted into Australian dollars using the current exchange rate

Get approved for a home loan!

Our mortgage brokers are experts in handling this loan structure. Reach out to them so they can assess your situation and work out the best strategy for you and your partner.

Please enquire online or call 1300 889 743 to discuss your situation with one of our mortgage brokers.