According to the Business Today explainer by Santosh Agarwal, CEO of Paisabazaar, buying a home is not merely a financial decision for most Indian households — it is one of the biggest financial commitments they will make. Deciding the loan amount, choosing whose income supports the loan, structuring the liability and planning for the household's other financial goals all play an important role. For households with two earning members, that is where a joint home loan becomes increasingly relevant.
How joint home loans work
Under a joint home loan, two or more co-borrowers take the loan and are jointly responsible for repayment, Agarwal wrote. Any default or missed repayment will affect the credit score of all borrowers. Agarwal also stressed a lesser-known distinction: a guarantor of a joint home loan may not be a co-borrower of the loan or a co-owner of the property. Different lenders prescribe their own set of requirements, and borrowers should not presume that the eligibility or ownership structure offered by two lending institutions will necessarily be the same.
Combined income raises eligibility — not necessarily affordability
Most banks and housing finance companies (HFCs) reiterate that adding an earning family member as a co-applicant can improve borrowing eligibility, according to Agarwal. Lenders evaluate repayment capacity through income, existing obligations, age, financial position and credit score; when two earning members apply together, lenders may consider both incomes, subject to their underwriting policies. This can increase the household's borrowing capacity. However, Agarwal warned that higher loan eligibility does not necessarily mean higher affordability — a household may become eligible for a larger loan amount when two incomes are considered, but that does not mean it should avail the maximum loan amount.
Down payment, EMI and liquidity trade-offs
Homebuyers often try to reduce loan cost by making the maximum down payment, which in many cases can impact the household's liquidity, Agarwal wrote. The right balance, he said, is an adequate down payment plus a sustainable EMI plus an adequate emergency corpus plus continued investments. A joint loan can make it easier for a household to strike this balance because repayment capacity is supported by more than one income. Joint borrowers can also share the EMI burden, which is particularly useful for dual-income households where all co-borrowers intend to contribute towards housing costs.
Co-owner rules and tax benefit eligibility
Agarwal highlighted that the distinction between co-borrowers and co-owners becomes worth considering when claiming tax benefits, as the ability to claim deductions depends largely on the borrower's ownership and repayment structure. Most lenders require all co-owners of a property to be co-applicants of the home loan.
| Consideration | Key point from Agarwal's analysis |
|---|---|
| Loan eligibility | Combined income of two earning members can increase household borrowing capacity, subject to lender underwriting |
| Affordability | Higher eligibility does not mean higher affordability; avoid availing the maximum loan amount |
| Repayment burden | Co-borrowers can share EMI payments, useful for dual-income households |
| Liquidity | Joint borrowing helps balance down payment, sustainable EMI, emergency corpus and continued investments |
| Credit score | Default or missed repayments affect the credit scores of all borrowers |
| Tax benefits | Deduction eligibility depends on ownership and repayment structure; the co-borrower vs co-owner distinction matters |
| Co-owner rule | Most lenders require all co-owners to be co-applicants of the home loan |
The question households should ask
Agarwal suggested a reframing: instead of asking "Should you take a joint home loan?", households should introspect whether taking a joint home loan would make their overall financial position stronger and more resilient. The additional borrowing capacity created by a joint loan, he said, should be treated as an option, not as an invitation to borrow more.
Agarwal's guiding question: would a joint home loan make the household's overall financial position stronger and more resilient?
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