A Mortgage for Singles and Couples

How the bank calculates credit capacity

Credit capacity is an assessment of whether you are able to repay a loan of a given size. The bank compares income on the one hand with commitments and living costs on the other. The greater the surplus of income over spending, the higher the capacity and the larger the potential loan.

The assessment is also affected by the credit history visible in BIK, the stability and source of income, and the number of dependants. The same rules apply regardless of whether one person or two are applying, but the effect differs depending on the configuration of income and spending.

A mortgage for a couple — combining incomes

When a couple applies for a loan, the bank usually combines the incomes of both applicants, which mostly increases credit capacity and allows for a higher loan amount. This is one of the main advantages of a joint commitment, especially when buying a larger property.

You must remember, however, that the bank also takes into account the higher living costs of a larger household and all the commitments of both partners. If one person has numerous loans or burdens, this can lower the joint capacity, despite two sources of income.

A mortgage for a single person — one source of income

A single person finances the loan on their own capacity, based on a single income. This usually means the need for higher individual capacity or accepting a lower maximum loan amount compared with a couple earning a similar amount per person.

The advantage is full decision-making independence and no dependence of your capacity on another person's financial situation. A single person can strengthen their position with a higher down payment, by reducing other commitments before applying and by ensuring a good credit history. In some situations adding an additional borrower, for example a family member, is also considered.

Responsibility for a joint loan

With a joint loan the question of responsibility is crucial. As a rule, co-borrowers are jointly and severally liable for the whole commitment, meaning the bank can pursue repayment from each of them in full, regardless of any internal arrangements between them.

For a married couple this is natural, but when a joint loan is taken on by people who are not married, it is worth thinking ahead about scenarios such as a break-up or financial problems for one side. A good practice is to agree on rules regarding ownership of the property and repayment, to avoid conflicts in the future.

Summary: matching the form to your life situation

The choice between a mortgage for a single person and a mortgage for a couple should follow from your income and life situation. A couple usually gains higher capacity by combining incomes but takes on joint and several liability for the entire commitment. A single person acts independently, which usually requires higher individual capacity. Whatever the form, it is worth ensuring a good credit history, a reasonable down payment and the reduction of other commitments before applying.