Common debt reducer: buying in your own name with a joint mortgage

A common debt reducer (CDR) lets some lenders count part of that repayment, where their rules and your evidence allow it. We check whether a lender can use this approach for you, then work out how much difference it makes. Your responsibility for the existing joint loan stays the same.

Having a joint mortgage does not automatically stop you buying another property in your own name. The hard part is showing the bank you can afford the new loan on top of everything you're already committed to.

Banks call this affordability check “serviceability”. They start with your income, then allow for everyday costs and existing debt repayments to see what is left for the new mortgage. If a bank counts only the part of the joint repayment it accepts as yours, there may be more room left for the new loan. Our borrowing power guide explains what else affects the amount you can borrow.

A common debt reducer isn't a separate loan you take out. It's a different way some lenders work out what you can afford. It won't pay down any debt, and it isn't debt consolidation (rolling debts into one loan) or debt recycling (an investment and tax strategy).

Yes. If the other borrower stops paying, the lender may still require you to repay the whole joint debt. Owning half the property or agreeing to pay half the mortgage between yourselves does not limit the lender to collecting half from you.

The smaller figure used for your new application does not change the old loan contract. Ask your solicitor what you remain responsible for. Moneysmart’s guide to relationships and money explains the risks of shared loans.

Here's a simple example of how the calculation works. It isn't an estimate of what you'd be approved for.

Say a bank counts $4k a month for your existing joint mortgage when it works out what you can borrow. If you qualify under a policy that accepts a 50% share, it would count $2k for you instead. That could make room for a new loan that didn't fit when the bank counted the full $4k.

This doesn't put an extra $2k in your pocket. Your actual mortgage repayment stays the same. The bank's calculation may use a higher repayment than you currently pay, to allow for rates going up. Once we run the full numbers, we can tell you what the change means for your borrowing budget.

If the shared property earns rent, we also check how much of that income the bank will accept. You cannot assume it will count all the rent while counting only part of the repayment.

Living costs work in a similar way. If you apply on your own but live with a partner, the lender doesn't just look at you. It may count living costs for your whole household, two adults, against your one income. That alone can take a big chunk out of what you can borrow.

Some lenders take a similar approach to the common debt reducer here. If your partner earns their own income and you can show it with their payslips, the lender may accept that they cover their own share of the household costs. Your living costs are then assessed closer to a single person's. Other lenders assess the whole household, and each sets its own rules for when it will split the costs. Children and anyone else you support are still counted.

Riley's file shows how much the household side can move the number. He earned about $180k. As a single applicant his borrowing power was about $840k. Once his partner and child were included in the application, it dropped to about $650k, a difference of roughly $190k on the same income.

It is worth checking if you want to buy on your own but still have a mortgage with your ex. An agreement about who will pay a debt does not, by itself, take your name off it. We need to see which accounts are still open and whether any agreed payout or refinance has gone through.

Some lenders only allow a repayment split for spouses who still live together, so their rules may no longer fit after separation. Other options for shared debts have their own rules, so we check each one separately. We start with where things stand now and the proof of who pays what, then work out what's possible.

If you are deciding whether to keep the home or sell after separation, compare the new loan and monthly budget with the cash left after a sale. Our divorce and separation home loan guide covers the wider process, while our guide to joint debts after separation explains what to check on the accounts.

Who you share the loan with matters. A lender that helps someone whose spouse pays part of the mortgage may have different rules for a brother, sister or ex-partner. These are the main differences we check before calculating your borrowing budget.

The other lenders we compare, including NAB, ANZ, Bankwest, ubank, Firstmac, Teachers Mutual, Resimac, People First and Brighten, don't include a repayment split in the policies we hold. With them, we plan on the whole joint repayment counting unless the lender confirms otherwise.

Our lender reviews cover costs and other loan features to compare as well.

Yes. A bank also compares your total debt with your yearly income. This is called your debt-to-income ratio (DTI). Even if a bank counts less of your monthly repayment, it may still count the whole loan balance in this separate check. We look at both before telling you what you can borrow.

Since 1 February 2026, APRA (the banking regulator) has limited how much of their new lending banks and other deposit-taking lenders can give to borrowers whose total debt is 6 times their annual income or more. The limit is 20% of new lending for homes people live in, and a separate 20% for investment lending. Some exemptions and specific counting rules apply.

This limits the lender’s overall lending. It isn't a ban on anyone borrowing 6 times their income or more. A lender can set tighter rules of its own, and a common debt reducer does not guarantee you will pass either check. See APRA’s DTI announcement.

Start with your current loan statements and what you want to buy or refinance. We can then explain which lender options are worth checking and what else you need to provide:

• Current statements for shared loans, including their limits, balances, repayments and repayment history.
• Who is named on each loan, how the borrowers are related and who will apply for the new loan.
• Proof of your income and other debts, plus the other borrower’s details if the lender needs them.
• Your everyday household costs, children or others you support, property ownership details and any rent received.
• Any relevant signed separation agreement, payout figures and evidence that an agreed debt closure or refinance has completed.
• Your deposit or equity (the value in your property above what you owe), the amount you want to borrow and any contract or settlement deadline.

Do not send someone else’s financial information without their permission. We can explain what the lender needs and how the other person can provide it securely.

We look at what is holding the application back. A smaller share of the joint repayment will not solve every problem: the bank still needs to accept your income, credit history and the property, and you need enough deposit. We also check that the new repayments leave you enough for everyday life. Depending on what's in the way, the fix might be a smaller loan, more deposit, or sorting out the joint loan first through a payout or refinance.

If you are already struggling with repayments, speak with the existing lender about support before taking on another mortgage.

• Can this lender count my share of the repayment for the kind of loan and relationship I have?
• How much would it count, and what proof do I need?
• How much rent will it accept, and whose living costs and other debts will it count?
• Does the other person need to provide documents or take a role in the new application?
• Will the bank still count the whole loan when comparing my total debt with my income?
• How do the rates and fees compare with the other loans I qualify for?

Macquarie: Understanding common debt reducer policy. Public guidance checked 28 October 2026.

AMP: Public Broker Hub policies, Common debt reducer section. Checked 28 October 2026.

Pepper Money: Investor policy overview. Public confirmation that CDR is offered, checked 28 October 2026.

APRA: Activation of debt-to-income limits as a macroprudential policy tool. Checked 28 October 2026.

Moneysmart: Relationships and money. Shared-loan guidance checked 28 October 2026.

Moneysmart: Debt consolidation and refinancing. Explanation checked 27 October 2026.

Client examples are based on real situations. Names and identifying details have been changed.