Split Loan Vs Joint Loan ??

Hi,

I have recently decided to buy a half share in a property and was looking for the best financing structure, the 2 goals I want to achieve from the setup are 1) maintain serviceability for future investment, 2) avoid any taxation issues. After speaking with a few professionals the below is what I have come out with:

2 x loans for equal amounts, each loan in a single name with the other party as Guarantor for each other`s loan. Whilst we will not be jointly on each loan we would become contingently liable for each others half of the total loan, in addition to of course the 50% of the loan that is in each of our names.

If either of us did default on each of our loans that we are directly responsible for the guarantor would potentially be called upon to meet the commitment of the 2nd half of the loan.

Any comments on this would be greatly appreciated

Thanks

In terms of what would need to be stated on any future loan applications, lender applications generally only require a Statement of direct Assets and Liabilities – we would not need to state contingent liabilities and would maintain serviceability compared to a joint loan.