Sean has seen friends' break-ups turn a property they bought together into a long, sticky problem. Couples usually join names because neither can afford the home alone, and bankers often suggest adding a second name to get a loan approved.
Should an unmarried couple buy a property together in joint names?
“I will not encourage couples to actually buy property by joining names.”
No. Joint names use up both partners' 90% loans on one property, and nobody plans for a break-up. If you must, set the terms out in writing; better still, buy in one name with the other as guarantor.
Why
It wastes your 90% loans
Each person can usually get up to 90% financing on their first two residential loans; from the third it is normally 70%. Buying jointly uses both partners' quota on one property, while buying separately lets a couple hold up to four at 90%.
Break-ups don't service loans
If a couple stops talking, the instalments can stop too. The bank sends warning letters to both of you, and both get arrears recorded in CCRIS.
Joining names often means overreaching
If one income qualifies for a RM300,000 home but together you buy a RM700,000 landed house, you take on about RM3,500 a month for 30 years. Lose one income and the home is at risk.
One name, one guarantor
Sean prefers the property in one partner's name, with the other acting as guarantor on the loan if the income falls short. The other partner keeps their own quota for later purchases.
What to do
- Don't buy a property as proof of your relationship.
- If one income can't support the home, look at a cheaper one before adding a second name.
- If you do buy jointly, agree in writing, ideally with a lawyer, what happens if either of you loses a job, stops paying or wants to sell.
- Consider buying in one name with your partner as guarantor.
Editorial Note: Summarised from Sean Tan's full episode. The quoted answer is in his own words; the rest is our paraphrase. Figures reflect the recording date, so check current rates and rules before acting on them.
Should you ever buy property with your Boyfriend or Girlfriend?
Sources & Verification Data
Summarised from Sean's full English captions for this November 2018 episode. The quoted answer is verbatim; everything else is paraphrased. The captions are unclear in places, so only clearly stated points are included. Loan margins are as described in 2018, so check current rules with a bank.
