You can do it,but there will be two disadvantages as well.First,as there will be no interest,there will be no tax saving on that account.Secondly,you will not get any deduction under Sec 80C for repayment of principal,if the repayment is made to any person other than a bank or approved financial institution.Sec 80C clearly stipulates this.However,you may pay some interest to your brother as deduction of interest under sec 24,while calculating income/loss from house property has no such condition.Yes,your brother will have to pay tax on that interest.You can decide after taking all prs and cons in mind.
