Do I Need a Co-Borrower When Refinancing? Philippines FAQ Guide

A co-borrower (sometimes called a co-maker or joint borrower) is a person who applies for the home loan together with you and shares legal responsibility for repaying the debt. Unlike a guarantor — who only steps in if you default — a co-borrower is equally liable from day one. Their income, credit history, and financial profile are all assessed by the bank as part of your joint application.

In the context of refinancing, a co-borrower can either be carried over from your existing loan or added (or removed) as part of the new loan arrangement. Philippine banks including BDO, BPI, Metrobank, Security Bank, and RCBC all have their own co-borrower policies, which is one reason working with a broker like Nook can save you a lot of back-and-forth.

Not necessarily. Whether you need a co-borrower depends primarily on whether your income alone is sufficient to qualify for the loan amount you're refinancing. Banks typically require your monthly amortisation to not exceed 30% to 40% of your gross monthly income. If your income comfortably meets this threshold on its own, you can refinance as a solo borrower.

However, there are situations where a co-borrower is either required or strongly recommended: if your income falls short of the bank's qualifying threshold, if you are self-employed with variable income, if you are nearing the maximum eligible borrowing age (most banks require the loan to be fully paid before you turn 65 to 70), or if you have a thin credit history. In these cases, a co-borrower with stable income can make the difference between approval and rejection.

Philippine banks generally accept the following individuals as co-borrowers for home loan refinancing:

• Spouse — In most cases, if you are legally married, your spouse is automatically required to be the co-borrower (or at minimum a co-owner) due to the conjugal property laws under the Family Code of the Philippines.
• Siblings — Accepted by most major banks, provided they can demonstrate a stable income.
• Parents or children — First-degree relatives are widely accepted across lenders.
• Other relatives — Policies vary; some banks like BDO and Security Bank may accept relatives up to the second degree of consanguinity.

Non-relatives are generally not accepted as co-borrowers for residential home loans in the Philippines. The co-borrower must also meet the bank's minimum age requirement (typically 21 years old) and must not exceed the maximum age at loan maturity.

Yes — refinancing is actually one of the most practical ways to remove a co-borrower from your home loan. Because refinancing involves taking out an entirely new loan to pay off the old one, the new loan agreement can be structured with or without the original co-borrower, subject to the new bank's approval.

To remove a co-borrower, you'll need to demonstrate that your individual income is sufficient to service the new loan on your own. The bank will reassess your debt-to-income ratio without the co-borrower's income in the equation. Common reasons people remove a co-borrower include separation or annulment, a co-borrower's retirement or change in financial circumstances, or simply a desire to be the sole obligor on the property.

If the co-borrower is your spouse and you are still legally married, removal may be more complex due to conjugal property rules — you may need legal advice in addition to bank approval. Note that removing a co-borrower from your existing loan (without refinancing) typically requires the bank's consent and is much harder to achieve.

Yes, and this is a common strategy among Filipino homeowners who want to qualify for a larger loan amount or a longer repayment term. When you refinance, the new bank evaluates your application fresh, so you can introduce a co-borrower who wasn't part of your original loan.

Adding a co-borrower can be especially useful if your income has decreased since you first took out the loan, if you want to extend the loan term beyond your own eligible age (a younger co-borrower can effectively extend the maximum term), or if you want to borrow additional funds on top of your outstanding balance. The co-borrower will need to submit their own full set of documents, including proof of income, valid IDs, and credit references. If you're considering this approach, Nook can match you with banks that are most flexible about co-borrower income structures.

Not always, but there are important restrictions. Under Philippine law, foreign nationals generally cannot own land in the Philippines, which limits how they can participate in a home loan secured by real property. However, a foreign national who is married to a Filipino citizen may be accepted as a co-borrower by some banks, with the Filipino spouse remaining the sole titleholder of the property.

For OFW (Overseas Filipino Worker) borrowers, co-borrowers who are also working abroad are typically accepted, provided they can submit the required income documents such as an employment contract, proof of remittance, and a valid OEC (Overseas Employment Certificate). Each bank has different requirements for overseas-based co-borrowers, so it's worth confirming the specifics before applying. Nook works with lenders who have OFW-friendly refinancing programs and can advise you on the most suitable options.

Adding a co-borrower increases your combined gross monthly income, which directly affects the maximum loan amount a bank will approve. Most Philippine banks cap the monthly amortisation at 30% to 40% of the borrowers' combined gross monthly income.

Here's a simplified example: if your gross monthly income is 60,000 pesos and your co-borrower earns 40,000 pesos, your combined income is 100,000 pesos. At a 35% qualifying ratio, you could service a monthly amortisation of up to 35,000 pesos. On a 20-year loan at 5.99% p.a., that qualifying amortisation could support a loan of approximately 4,800,000 pesos — significantly more than what you might qualify for on a single income alone.

This matters in refinancing when you want to cash out equity, consolidate debt, or extend your loan term while keeping payments manageable. Note that the co-borrower's existing debt obligations (such as personal loans or credit card balances) may reduce the usable income the bank credits to them.

A co-borrower is required to submit their own complete set of documents alongside the primary borrower's application. While requirements vary by bank, the standard documents typically include:

• Two valid government-issued IDs with photo and signature
• Proof of income — for employed co-borrowers: latest payslips (past 1–3 months), Certificate of Employment with compensation, and latest ITR; for self-employed: ITR for the past 2 years, audited financial statements, and business registration documents
• Latest 3 to 6 months bank statements
• Accomplished loan application form
• Proof of relationship to the primary borrower (e.g., PSA marriage certificate for spouses, PSA birth certificates for parent-child relationships)

If the co-borrower is an OFW, additional documents such as a valid employment contract, POEA/OEC documentation, and proof of remittance are typically required. Nook provides a personalised document checklist for both the borrower and co-borrower once you start your refinancing application — making the process significantly easier to navigate.

Not necessarily — being a co-borrower (loan obligor) and being a co-owner (property titleholder) are legally distinct things in the Philippines, and not all banks require both roles to be the same person.

However, there is an important exception: if you are legally married, conjugal property rules under the Family Code generally mean that your spouse has a legal interest in property acquired during the marriage, regardless of whose name is on the title. Most banks will therefore require a married primary borrower's spouse to sign as co-borrower or at least to sign a consent to mortgage, even if the spouse is not on the title.

For non-spouse co-borrowers (e.g., a sibling helping you qualify), it is common for them to be on the loan but not on the title. Banks are generally comfortable with this arrangement as long as the collateral (the property) is clearly owned by the primary borrower and properly mortgaged as security for the loan. If you're unsure how your specific ownership arrangement affects your refinancing options, Nook's advisors can walk you through the implications before you apply.

A co-borrower with a poor credit history or significant existing debt obligations can weaken your refinancing application rather than strengthen it. Philippine banks check the credit records of all borrowers — including co-borrowers — through the Credit Information Corporation (CIC) and their own internal systems. Defaults, restructured loans, or high outstanding balances in the co-borrower's name can raise red flags for the approving bank.

If your co-borrower has existing loans, banks will typically deduct the monthly obligations from the co-borrower's gross income before calculating how much of their salary can be credited toward qualifying for your refinance. This can reduce or even eliminate the income advantage a co-borrower otherwise brings to the application.

In cases where a co-borrower's credit issues are the main barrier to refinancing, it may be worth exploring whether you can qualify on your own income — or whether a different co-borrower with a cleaner credit profile is an option. You can also read our guide on how to refinance your home loan with bad credit in the Philippines for strategies that may apply to your situation. Nook works with multiple lenders and can help identify which banks are more flexible when co-borrower credit history is imperfect.