What is joint home loan?
Also called: co-applicant home loan, co-borrower, joint borrower loan
A joint home loan is one loan taken by two or more people, typically spouses or a parent and child, who are all liable for the full amount. Combining incomes raises eligibility, and each co-owner who also repays can claim tax benefits separately.
Lenders accept close family as co-applicants: spouse, parents, sons, and in many banks unmarried daughters or siblings who co-own the property. Friends and unmarried partners are usually not accepted together. Being a co-borrower doesn't make you an owner, and being an owner doesn't make you a co-borrower; the tax benefits depend on being both.
Eligibility is where the arithmetic helps. Two incomes of ₹80,000 each qualify for far more than one of ₹1.2 lakh. But each person's existing EMIs and credit score come along too, and a poor score on one side can raise the rate for both.
On tax, under the old regime each co-owner-borrower can claim up to ₹2 lakh of interest on a self-occupied house under Section 22 (the old 24(b)) and up to ₹1.5 lakh of principal within Section 123 (the old 80C), in proportion to their share of repayment. A couple can together shelter up to ₹7 lakh a year this way. The new regime allows neither on a self-occupied home.
Women-owned homes carry an added saving in some states. Delhi charges 4% stamp duty for a woman buyer, 5% for joint ownership of a man and a woman, and 6% for a man alone. Some banks also shave a few basis points off the rate when a woman is the primary applicant. The downside is permanence. If the relationship breaks down, the lender won't release either borrower until the loan is closed or refinanced in one name.
A Delhi couple buys a ₹1.2 crore flat in Dwarka in joint names. Stamp duty at 5% comes to ₹6 lakh, against ₹7.2 lakh if the husband had bought alone; and each of them can claim interest and principal deductions on the shared loan under the old regime.
Couples put the wife as co-borrower to raise eligibility but register the flat only in the husband's name. She then can't claim any tax deduction despite paying half the EMI.
Questions people ask about joint home loan
Can a co-borrower be removed from a joint home loan later?
Only with the lender's consent, and usually by refinancing the loan in the remaining borrower's name after the bank rechecks that person's income.
Is it compulsory for co-owners to be co-borrowers?
Most banks insist that every owner of the property joins the loan, even if one has no income, so the mortgage covers the whole title.