Eligible Partners, Multiple Party Loans
Scenario 1: Both Partners Entitled to a Subsidy
If both of you are eligible for DHOAS, you can take out a joint home loan and each receive a subsidy.
The benefit of you both using your DHOAS entitlement on a joint loan is that you increase your subsidised loan limit - the portion of your home loan that can attract a subsidy.
How does it work?
You will each be deemed to be liable for 50% of the joint home loan and you will each receive an equal subsidy payment amount, even where your individual eligible tier levels are different.
To calculate your entitlement, we first total your combined subsidised loan limits under your respective eligible tiers.
We then calculate the total monthly subsidy that is payable on your joint subsidised loan limit.
Each member will receive a payment that is half the total monthly subsidy payable on their joint subsidised loan limit.
This may result in one party receiving more than they would under their individual tier, and the other receiving less.
Example 1: Joint loan that is equal to or greater than combined subsidised loan limit
** 2010-11 subsidised loan limits are used in all examples
One partner is eligible under Tier 1, which has a subsidised loan limit of $197,773 and a maximum monthly subsidy of $282.42, and the other is eligible under Tier 2, which has a subsidised loan limit of $296,659 and a maximum monthly subsidy of $423.63 (as at July 2010).
If they take out a joint home loan that is equal to or greater than their combined subsidised loan limit of $494,432, the monthly subsidy payable on the combined loan limit will be $282.42 + $423.63, which is $706.05 (as of July 2010).
Each partner will receive 50% of $706.05, which is $353. This means the partner who is eligible under Tier 1 receives more, and the partner eligible under Tier 2 receives less.
Example 2: Joint loan that is less than combined subsidised loan limit
One partner is eligible under Tier 1, which has a subsidised loan limit of $197,773, and the other is eligible under Tier 2, which has a subsidised loan limit of $296,659.
They take out a joint home loan of $400,000, which is less than their maximum, combined subsidised loan limit of $494,432.
Their subsidy is calculated on $400,000, the full amount of their home loan, all of which attracts a DHOAS subsidy. The subsidy amount payable on $400,000 is $571.20 (as at July 2010). Each partner will receive a monthly subsidy of $285.60.
Please note: If your joint home loan amount is not much more than the subsidised loan limit of just one of the partner's tiers, you may wish to consider using the DHOAS entitlement of only one partner on the loan, and preserving the entitlement of the other partner for another time. Your choice depends on your personal circumstances.
Scenario 2: Only one partner is DHOAS eligible on a shared loan
Where only one partner is a subsidised borrower on a couple's shared loan, then the subsidised borrower will be taken to be liable for the whole loan and will be able to use the full value of their subsidised loan limit as if they were a sole borrower.
Example:
You're eligible under Tier 3, and can receive a DHOAS subsidy on a subsidised loan limit of $395,546.
You take out a $400,000 home loan with your partner, who is not eligible under DHOAS.
For the purpose of DHOAS, you are deemed to be liable for the $400,000 loan, which is greater than your loan limit of $343,258.
This means you can receive the maximum subsidy payable on the loan, which is $564 (as at July 2010).
Scenario 3: Eligible borrower has shared loan with someone not their partner
Where a subsidised borrower has a shared loan with a person who is not their partner, in which both parties are jointly liable, then the subsidised borrower will be taken to be liable for half the loan. This is the capital amount against which the subsidised borrower's loan limit is compared.
This prevents the DHOAS subsidy that is paid to the subsidised borrower being used for the benefit of a person who is not entitled or who has a separate entitlement in his or her own right.
The arrangement applies even if the other borrower to the DHOAS recipient owns less than 50% of the property.
Example:
You are eligible for DHOAS under Tier 1. You take out a $400,000 loan with your parent.
The amount of the home loan that you will be deemed to be liable for is $200,000.
Your Tier 1 subsidised loan limit is $197,773, for which you will receive the maximum monthly subsidy payment of $282 (as at July 2010).