Death of joint home loan borrower: Who pays the EMIs and who owns the house? SC advocate explains

If you have taken a joint home loan and the co-borrower dies, you may assume that continuing to pay the EMIs will give you full ownership of the house. But that is not necessarily the case.

Amitraj Kaushal, Advocate, Supreme Court of India, explained the key conditions every joint home loan borrower should know.

Who is responsible for repaying the home loan if a co-borrower dies?

Kaushal explained that in most joint home loans, both borrowers sign on as 'joint and several' obligors. The moment one co-borrower passes away, the entire responsibility for the remaining EMIs falls on the surviving borrower by default,

He said it does not matter who was actually paying more of the EMI while both were alive. The bank cares about recovering its money, and the loan agreement usually already covers this scenario.

Does the surviving borrower automatically get full house ownership?

“This is where people often get confused, and it trips up a lot of families,” Kaushal noted.

He explained that paying off the loan doesn't automatically make you the owner of the entire property. Ownership follows the title deed, not the loan repayment.

“If the deceased borrower's share was jointly held, it typically passes to their legal heirs (or a nominee, if one was named) as per succession law or a will, not to the surviving co-borrower just because they keep paying the EMIs,” he noted.

For example, if two siblings jointly took a home loan and one dies, the surviving sibling is liable to repay the outstanding loan, while the deceased sibling’s share of the property could pass to their spouse, children, or other legal heirs, depending on the applicable succession law or will.

Why can this become a problem?

The surviving borrower could end up paying the entire loan for a house in which the deceased borrower’s legal heirs have a share.

“This creates a genuinely tricky situation. You could end up paying off a loan for a house where someone else legally owns a chunk of it,” Kaushal said. This is why families should sort out ownership and succession arrangements before taking the loan.

How does a joint home loan work when taken with a friend?

Kaushal explained that if a friend or unrelated co-borrower dies, the surviving borrower remains liable for the full loan, while the deceased’s share of the property still goes to their legal heirs rather than automatically to the surviving friend.

“Most banks do allow joint home loans with friends, though the terms can be stricter. Banks are usually more comfortable with family co-borrowers since inheritance and succession are more predictable,” he added.

What should joint home loan borrowers do to avoid disputes?

Kaushal recommends that borrowers:

• Get a clear co-ownership agreement in writing at the time of taking the loan, including what happens to each person's share if one dies.
• Consider making a will to clearly specify who should inherit the property.
• Consider loan-protection insurance, which can help repay the outstanding loan after the borrower’s death and reduce the financial burden on the survivor.

According to Kaushal, ideally, one should take a joint home loan with someone they are comfortable eventually passing the property to, or put safeguards in place so that ownership and loan liability match their intentions.

What if the surviving borrower cannot repay the loan?

Kaushal said if the surviving borrower defaults, the bank doesn't just walk away.

“The bank can recover dues from the deceased borrower's estate as well, since the estate typically remains liable for outstanding debts unless it's been fully distributed and there is nothing left to recover from,” he noted.

Disclaimer: This is only for informational and educational purposes. Please consult a qualified expert for the latest laws and regulations.