When Two People Buy Together – But Only One Pays the Loan

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It’s surprisingly common: two names on the title, but only one person paying the mortgage.

Whether it is a couple, siblings, or friends buying together in Victoria, unequal financial contributions can lead to serious disputes—especially if the relationship ends or one party wants to sell.

David Dawn, Licensed Conveyancer at Victorian Property Settlements, explains the risks, the legal defaults, and the steps you can take to protect your contribution when buying jointly.

Equal Ownership vs Unequal Contributions

In Victoria, when two people buy property and go on title as joint proprietors, the law assumes:

  • Equal ownership (50/50)

  • Equal entitlement to proceeds if sold

  • Equal right to live in the property

  • No distinction based on who paid more

So even if one person pays all the deposit, all the loan, and all the expenses—the property is still legally considered jointly owned in full.

Joint Proprietors vs Tenants in Common

If you buy as joint proprietors, you both own the property as a whole. If one dies, the other inherits the property automatically—even if their will says otherwise.

If you buy as tenants in common, you can split the ownership unequally (e.g. 60/40 or 70/30) and leave your share to someone else in your will.

This is crucial when:

  • One party contributes more money

  • Family members are involved

  • You want to protect your estate

Tip: If contributions are not equal, buy as tenants in common with the shares clearly recorded on the title.

What Happens If You Separate or Disagree?

If one party wants to sell and the other does not, or if you cannot agree on proceeds, either party can apply to the Supreme Court under section 228 of the Property Law Act 1958 (Vic) for an order for sale.

Courts can also adjust proceeds based on financial contributions—but only if:

  • There is evidence of a loan or unequal arrangement

  • One party can prove an intention that the ownership was not meant to be equal

This is difficult and expensive to prove without documentation.

How to Protect Yourself

✅ Buy as tenants in common with the agreed share percentages recorded on title

✅ Document any loan or gift made by one party (e.g. from a parent)

✅ Register a loan agreement or caveat if money was advanced but no ownership recorded

✅ Keep clear financial records showing who paid what

✅ If possible, enter a co-ownership agreement that sets out expectations for:

  • Loan repayments

  • Outgoings

  • What happens if one party wants to sell

  • How disputes will be resolved

Can a Loan Be Recovered?

If one person pays the mortgage but is not on title, they are not a legal owner. In that case, recovery becomes very difficult and often involves:

  • Arguing a constructive trust in court

  • Proving unjust enrichment

  • Seeking compensation via litigation

It is much better to document everything at the time of purchase, not years later.

Real Example

A de facto couple purchases a townhouse in Cranbourne for $620,000. The property is registered in both names as joint proprietors.

The male partner pays the entire deposit, every mortgage instalment, and all rates over five years. After a relationship breakdown, the female partner seeks 50% of the sale proceeds.

Because there was no loan agreement, no title distinction, and no documented intention of unequal ownership, she is legally entitled to half. The courts will not assume otherwise.

Conclusion

Buying property together is a big commitment. If financial contributions are not equal, the paperwork must reflect that—otherwise the law assumes equality, even when that feels unfair.

At Victorian Property Settlements, we help joint buyers document their ownership properly, draft co-ownership agreements, and protect their interests in the long term.