Marriage or partnership doesn’t require that both spouses apply for home loans together in New Zealand, although they often want to do so with a big-ticket purchase such as a house. If one spouse doesn’t have income, some people may assume they can borrow more when applying for a home loan on their own. However, this is not the case, and the option doesn’t come without some drawbacks.

Spouse/partner is not working when applying for a home loan

Video Timeline

1.My spouse/partner is not working, should I apply for a home loan without my spouse? – 00:14

2. What if my spouse/partner works but the income is hard to prove? – 02:30

1. My spouse/partner is not working, should I apply for a home loan without my spouse? 

If your spouse/partner is not working or have no income at all, such as he or she stays at home and looks after kids, you won't be able to borrow more when applying for a home loan on your own. This is because:

When you fill out a mortgage application form, you’ll be asked to declare your marital status. If you’re married or in de facto relationship, then your bank will ask for your spouse income. When your spouse hasn’t had a source for income, he/she becomes a dependent - your income will be used to cover your whole family living expenses, from the perspective of lenders. In this case, it makes no difference you apply for a home loan either with or without your spouse as a co-borrower.

But, a word of warning, if you exclude your spouse/partner on the current home loan application but later when he/she returns to work and you plan to purchase more properties together, it may compromise the future home loan outcome. For example, you may not be able to top up equity from the previously purchased property which under your own name, unless you let the two properties secure with the same bank (for details, please refer to one of  our videos “How does property title under a single name may affect your future home loans?”). It’s probably better to include your partner in the current application.

2. What if my spouse/partner works but the income is hard to prove?

If your spouse/partner has some kind of income, but his/her income evidence may not satisfy bank’s requirement, say he/she is self-employed, but doesn't have two years’ financial report or receive income in cash, as long as you declare their income situation, it is more likely you can borrow more by applying by yourself rather than a joint application because in this cases, your bank will only calculate living expenses based on one adult, not a couple. Again, you also need to consider the implication for future borrowing as mentioned in the last point.

Prosperity Finance – here to help

In a nutshell, there’s no straightforward answer when it comes to applying for a mortgage jointly or separately, depending on your situation and plan. Getting the expert advice is important - speak with a mortgage advisor like us by calling 09 930 8999 or email: support@profin.co.nz for further help. 

Other Articles You Might Like:

 How does property title under a single name may affect your future home loans?

How do I add or remove a name to a property title in New Zealand?

Disclaimer: The content in this article are provided for general situation purpose only. To the extent that any such information, opinions, views and recommendations constitute advice, they do not take into account any person’s particular financial situation or goals and, accordingly, do not constitute personalised financial advice. We therefore recommend that you seek advice from your adviser before taking any action.