Two people sitting on opposite sides of a table, and one of them wants out
Three years ago they walked into the bank together, signed the same set of documents, and bought the same house.
Today one of them has moved out and wants their name off the loan.
The direct answer is that you cannot withdraw on your own.
Because the loan is a contract between the borrowers and the bank, not an arrangement between two people.
The bank approved that money by assessing the repayment capacity of both of them together.
Removing one halves the assurance the bank relied on.
And no creditor agrees to that without getting something in return.
A co-borrower is a joint debtor, not a half borrower
This is the misunderstanding that makes people sign without thinking.
Section 291 of the Civil and Commercial Code provides that where several persons are joint debtors, the creditor may demand performance from any one of them, in whole or in part, at the creditor's choice.
And every debtor remains bound until the debt has been discharged in full.
Which means the bank may demand the entire amount from either one, not half from each.
If the other person stops paying, the bank does not chase them. It chases whoever is easier to chase.
Usually the one still on a salary, still using the same phone number, still living at the same address.
The name on the loan and the name on the deed are different things
This is where people are hurt most, and it is what to understand before signing.
Ownership of the house follows the name on the title deed. The debt follows the name on the loan agreement.
The two do not have to match.
A co-borrower who is not on the deed carries the full debt and owns nothing.
Conversely, somebody on the deed who is not a borrower owns an asset mortgaged against somebody else's debt.
So before signing as a co-borrower, the first question is whether your name will also be on the deed.
If the answer is no, the next question is why.
Three routes that genuinely work
One, refinance in a single name, which is the route most often used.
Whoever is staying applies for a new loan alone, uses it to clear the existing debt, and the old agreement ends.
The condition is that they must qualify on their own income alone.
If they cannot, this route closes, and that is where most of these cases get stuck.
Two, substitute a new co-borrower, replacing a former partner with a sibling, for example.
This needs the bank's consent, because it is a change of debtor, which under section 350 must be made as a contract with the creditor as a party.
The bank assesses the new person exactly as it would a fresh applicant.
Three, sell the house and clear the debt, which nobody wants to hear, but which ends things most cleanly when the first two routes are closed.
The caution is that if it sells for less than the outstanding balance, the shortfall remains a debt of both people.
Notice that all three go through the bank.
There is no route the two people can take between themselves that has any effect on the bank.
A private agreement matters, but does not bind the bank
Separating couples usually write something down about who will carry the debt from now on.
That document genuinely matters between the two of them, and means nothing to the bank.
If the one who promised stops paying, the bank can still demand the full amount from the other.
What the document gives is a right of recovery.
Section 296 provides that as between joint debtors themselves, each bears an equal share unless otherwise agreed.
So whoever paid on the other's behalf can recover that share.
But recovering means suing, not telephoning.
So the thing to do is keep evidence of every payment from the first day you start paying alone.
Transfer slips with dates and amounts are what actually works on that day.
What it does to both credit records
This debt appears in full on both people's credit reports, not half on each.
Which means the one who moved out and no longer lives there is still carrying that debt in their own record.
That bites immediately when they apply for a loan on a home of their own, because the bank sees a large liability in their name.
And if the other person pays late, the damaged payment history sits in both reports.
This is why agreeing to be somebody's co-borrower is not the small favour many people take it for when they sign.
Three things to do before signing as a co-borrower
One, establish clearly whether your name will be on the deed, because debt without an asset is the worst position in this whole subject.
Two, write an agreement between yourselves on day one, setting out the payment shares, what happens if one stops paying, and the terms for buying out the other's share.
It does not bind the bank, but it binds the two of you, and it is the only thing left on the day you can no longer talk to each other.
Three, work out whether you could carry the whole instalment alone, because that is what the law allows the bank to require, and it is a situation to plan for rather than a rare one.
If the answer is no, you are not ready to sign.
Frequently asked questions
Can a co-borrower remove themselves?
Not alone. It requires the bank's consent, because the loan is a contract with the bank rather than an arrangement between the two borrowers.
Who can the bank pursue?
Either one, for the whole amount, under section 291, which lets a creditor demand performance from any joint debtor in whole or in part, with everybody bound until the debt is fully discharged.
Does a co-borrower own the house?
Not necessarily. Ownership follows the title deed while the debt follows the loan agreement, so a co-borrower not named on the deed carries the whole debt and owns nothing.
Is a private written agreement enough?
Not for the bank, but it matters between the two of you as evidence of the agreed shares when recovering later.
Can I recover payments I made on the other's behalf?
Yes, proportionally, because section 296 provides that joint debtors bear equal shares between themselves unless otherwise agreed. But you need evidence of payment and usually have to bring proceedings.
Does this debt affect my next loan?
Yes, because it appears in full on both credit reports rather than half on each, and any late payments sit in both records.
Can we swap in a different co-borrower?
Yes, with the bank's consent, because a change of debtor must be made as a contract with the creditor as a party, and the bank assesses the new person as a fresh applicant.
In short
- A co-borrower cannot withdraw alone. It always goes through the bank.
- A co-borrower is a joint debtor, so the bank may demand the whole amount from either one.
- The name on the loan and the name on the deed are different things and need not match.
- The three workable routes are refinancing alone, substituting a co-borrower, or selling.
- A private agreement does not bind the bank but supports recovery between the two of you.
- Keep every payment slip from the first day you pay alone.
- The debt appears in full on both credit reports and affects the next loan.
- Before signing, ask about the deed and work out whether you could pay alone.