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A Guide for Couples Combining Finances and Mortgaging

A relationship milestone, such as purchasing a property, is a time of excitement and celebration. But the process of two parties disclosing, discussing and combining finances, often raises questions.

Should you open up joint accounts? What if one person in the relationship earns disproportionately more? Is one person an avid saver and one a spender? These are just some of the many factors couples are faced with navigating when entering the property market together.

While a learning curve for many, combining finances for investment purposes also presents a fantastic opportunity to re-evaluate, strategize, and work towards increased financial prosperity. After all, property ownership often bestows the beginnings of an investment trajectory, thus an opportunity to self-empower through financial growth.

Knowing what your broker should be doing for you is the first port of call, in conjunction with understanding what steps you need to take as a couple.

With that in mind, we’ve put together factors to consider when combining finances and mortgaging:

De-shame and Disclose

Moving forward as a couple financially means laying all your cards on the table. Not only to each other, but also to your broker to ensure all debts, credit history, assets, and financial responsibilities are disclosed and can be tackled accordingly.

Money Talk Should Be An Ongoing Dialogue

Don’t wait until you’re about to embark on a big investment, or facing a financial crisis, to start talking about money with your partner. Talking about it and strategizing in an open, proactive and positive way, de-stigmatises the topic of money and encourages action.

The Consensus On Joint Accounts

Are joint accounts a relic of the past or a viable component to combining finances? This is an all too common question raised, but one that ultimately comes down to personal choice. Plenty of couples utilise joint accounts for repayments, savings and utilities, but choose to remain independent with their own transaction accounts.

There are no hard and fast rules; it’s about finding what works for you both.

Hold Yourself Accountable

Setting goals and making financial decisions and commitments as a couple means holding yourself accountable, not each other. Certainly, encouraging and supporting one another helps, but delivering on financial steps promised is ultimately an individual’s responsibility. If the ball drops because of one half of the partnership, this is where uniting financially will break down. The key is to plan realistically, live within your means, and celebrate triumphs and milestones.

The Question Of Ownership Percentages

It is not uncommon for both parties to contribute varying amounts, be it loan repayments, or the initial deposit. As with any large financial decision, two key actions should be undertaken from the outset:

  • Document (in writing) the agreement between both parties, and;
  • Engage a trusted legal expert to overlook everything and provide basic advice on rights and responsibilities should circumstances change.

Don’t Underestimate The Benefits of Guarantor Loans

Particularly for couples breaking into the property market for the first time, security guarantor loans can be a financially beneficial route to take. Aside from avoiding significant mortgage insurance fees, guarantor loans bypass the need for a deposit, enabling a quicker path towards investment.

Equity And Unity Extends Beyond Economics

Building capital and seeking success and prosperity as a couple extends beyond economics. Recent studies found that women still undertake a disproportionately greater amount of domestic labour than men, even when single and working full-time. Further, a recent USB report revealed that within heterosexual marriages, “56% of married women leave key financial decisions to their husband”.

At a time where factors of inequity and financial literacy are heavily discussed and accessible through mainstream and online discourse, joining forces poses a great opportunity for couples to meet halfway on all counts, for a more prosperous, empowering and fairer future.

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The information contained on this website is general in nature and is no way intended to be legal, financial or investment advice. The information provided is not intended to be taken as, or relied upon as financial advice or providing recommendations in relation to any financial product. You should seek independent financial advice from a licenced financial services advisor to check how this information relates to you and your circumstances. Inovayt Pty Ltd and Inovayt Wealth Pty Ltd does not accept any liability for injury, loss or damage incurred by the use or reliance on the information provided on this website.

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