What happens to a joint mortgage after separating or divorce?
Don't assume you can just stop paying the mortgage (you can't)
Separating may mean you're no longer romantically linked with your ex, but if you've got a joint mortgage together then you remain financially linked. This means if you fail to keep up with the mortgage repayments there could be serious consequences – not just for one of you, but both. This guide explains what you need to know.
Thanks to mortgage brokers L&C Mortgages and Habito for their help with this guide
Who is responsible for the mortgage if we separate?
Where both your and your partner's names are on the mortgage then you've got what's known as a joint mortgage. Having one of these means you're financially linked to each other.
This is important, as being financially linked in this way means you're both responsible for the mortgage – even if you split up.
In short, with a joint mortgage:
Everyone named on the mortgage is responsible for paying it. You're all 'jointly and severally' liable for ensuring the mortgage is repaid. So responsibility is shared equally between you and your partner/ex (even if just one of you is chased for payments).
Everyone named on the mortgage will be impacted if a payment is missed. If a payment is missed, both your and your partner's credit files will be impacted. And where you fall into mortgage arrears, both your credit files will be seriously damaged, which may impact your ability to get credit – plus your home will be at risk of repossession.
This continues to apply even if one (or both) of you moves out. What matters is whose name appears on the mortgage, not who is living in the property.
So for as long as both your and your partner's names remain on the mortgage...
"You're BOTH equally responsible for ensuring mortgage payments continue to be made on time – regardless of your relationship status or living arrangements."
This will apply until the mortgage is cleared or your name is removed from the mortgage.
Quick questions:
What if there's only one name on the mortgage?
If only one name appears on the mortgage then you don't have a joint mortgage and the named person alone is responsible for making the mortgage payments. This applies regardless of who actually lives in the property.
See what to try if you're struggling to pay the mortgage on your own.
Can we be financially linked by other joint products?
Along with mortgages, there are three other products that can result in financial linking: joint loans, joint bank accounts and, in some circumstances, utility bills.
That's why if you've separated then it's important to financially delink.
What are my mortgage options if we've separated?
If you've separated from your partner then one of you taking sole responsibility for the mortgage is a potential solution – in other words, removing one name from the mortgage so it's no longer a joint mortgage.
To do this, that person must agree to transfer their share of the property to the other. This is necessary because you can't be on a mortgaged property's title deeds without also being named on the mortgage.
Doing this is known as a 'transfer of equity'. Normally it involves one person 'buying out' the other – in other words, paying for their share of the property.
Here's an example of how it might work:
'Buying out' example
The Partways buy a house for £200,000, each putting in £25,000 as a deposit, with the rest being funded through a £150,000 mortgage.
Five years later they split up, and Mrs Partway looks to buy out Mr Partway. By this time, there's £120,000 left on the mortgage, while the property is valued at £230,000.
To work out what it would cost to buy out Mr Partway, Mrs Partway subtracts the mortgage balance from the value of the house, then divides this figure by two. So:
- £230,000 minus £120,000 equals £110,000 and...
- £110,000 divided by two equals £55,000.
Therefore, it would cost £55,000 for Mrs Partway to buy out Mr Partway.
Be aware that what it will cost to buy the other out is not always straightforward. In other words, there's no guarantee you'll both agree to a 50/50 split of the equity you've built up in your home (property value minus outstanding mortgage) – so you might need to negotiate.
Different factors can impact the final agreement, such as:
- Someone having contributed more to the deposit or mortgage
- Your marital status
- Your tenancy arrangement ('joint tenants' or 'tenants in common')
- If you've got dependent children (and if the home will remain the family home).
Can't agree? Then you may have to try mediation or seek legal advice – but this will cost.
Even if you agree, there's still plenty to consider. This includes how to finance buying out your partner and whether you could afford the mortgage on your own...
Ways of buying out an ex from the mortgage and home
Here are five ways of buying out an ex so you've no longer got a joint mortgage:
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Savings. For example, money you've got stored away in a savings account or cash ISA (though if the cash is in a fixed account you might not be able to access it immediately). If you've not got enough savings, a loved one might be able to lend you the difference.
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Further advance. This is where you borrow more money from your mortgage lender. Typically it'll be at a different rate of interest to your main mortgage and there might be a product fee. You can apply directly or through a broker.
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Second charge mortgage. Very similar to a further advance, the main difference being that the extra cash comes from a different lender entirely.
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Remortgage. Meaning ditching your current mortgage deal and getting a new one from a different lender. If your current deal is ongoing, you'll likely pay an early repayment charge to ditch it (which can cost £1,000s). Unlike a further advance or second charge mortgage, with remortgaging all the money you borrow will be on the same interest rate.
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Simple transfer of equity with no money changing hands. It's entirely possible your partner won't ask for money in exchange for transferring their share of the property. Maybe they'll be compensated in another way, or want your children to remain in the family home (possibly as part of a broader separation agreement).
It can be tricky to work out which option is the best and cheapest way to buy out your ex. If you're struggling, then it's sensible to discuss the options with a mortgage broker.
Be aware a transfer of equity is a legal process, so you'll need to instruct a conveyancing solicitor (see how to find a well-priced conveyancing solicitor). Consider one that offers a free consultation, which you can use to discuss the pros and cons of a transfer of equity.
You'll need to prove you can afford the mortgage on your own
To turn a joint mortgage into one where only you are responsible will involve an affordability check, as lenders have to be confident you could afford the monthly payments.
Passing this affordability check could be tough if a lender is only considering one income rather than two, especially if you hope to increase the size of your mortgage.
See our Boost your mortgage chances guide for ways of improving your odds, while our How much can I borrow? guide explains how much a lender might lend you.
Borrowing more might increase your loan-to-value (and the interest rate)
Taking on a bigger mortgage in order to buy out an ex might increase your loan-to-value (LTV, the percentage of your home's value that you're borrowing as a mortgage). LTV has an important impact on the cost of a mortgage, as interest rates tend to get cheaper the lower your LTV – mainly at 90%, 80%, 75% and 60% LTV.
So if buying out your partner pushes you into a higher LTV bracket, the interest rates available are likely to be more expensive. And if you're only able to access more expensive interest rates, you might find it even tougher to prove your affordability...
Here's an example to illustrate:
Higher LTV example
Mrs Partway wants to keep the family home. To do this, she is increasing the mortgage by £55,000 in order to buy Mr Partway's share of equity in their home.
Their joint mortgage balance is currently £120,000, while the home is worth £230,000, meaning their LTV is 52%, where the best interest rate available is 4.5%.
But increasing the size of the mortgage by £55,000 means the balance grows to £175,000, so the LTV goes up to 76%, where the best interest rate is 5.5%.
Over 20 years, a £120,000 mortgage at 4.5% would cost £759 a month, a £175,000 mortgage at 5.5% would cost £1,204 a month – that's a difference of £445 per month.
What to try if you're struggling to prove your affordability
If you want to buy out your ex but you're struggling (or would struggle) to pass a lender's affordability checks, there are some alternatives you could consider:
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Add a new name so it remains a joint mortgage. For example, if you're in a new relationship, you could replace your ex's name with your new partner's name. If your new partner is earning, a lender will take this into account when considering affordability (two incomes is likely to be more convincing than one income alone).
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Switch from a joint to a 'guarantor' mortgage. Here, someone like a close family member agrees to be your guarantor, meaning they're legally liable for covering your mortgage repayments in the event you can't pay. Lenders sometimes want the guarantor to be named on the mortgage themselves, meaning the guarantor might have to play a more active role.
Not all lenders offer guarantor mortgages, but a mortgage broker can usually help.
What if I'm not able to buy out my partner?
If buying out your partner isn't possible, you'll have to consider alternatives. These include:
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Continue with BOTH names on the joint mortgage. In other words, leave things as they are. This could be a temporary fix whilst you consider what's best to do. Remember, you'll both remain responsible for the mortgage repayments in the meantime.
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Take in a tenant and change your mortgage to a buy-to-let. This might be a solution if you're not willing to sell your property but are both happy to move out. You'll need to get your lender's permission to do this. If it agrees, you'll likely be charged a higher rate of interest, but the rental income will hopefully be able to cover your mortgage repayments.
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Sell your property and repay the mortgage in full. By selling your home you can use the sale proceeds to repay what's left of your mortgage. Whatever's left over can be split between you and your partner. While this might seem daunting, there are some benefits, such as:
- Financially de-linking from your partner. As there'll no longer be a mortgage with both your names, this can help you financially delink from your partner.
- Future mortgage acceptance more likely. You'll both have a better chance of being accepted for another mortgage in future if you're not associated with your current mortgage.
However, be careful of selling up and repaying your mortgage whilst in the middle of a mortgage deal – for example, halfway through a five-year fixed rate – as you'll likely be stung by an early repayment charge (something that can cost £1,000s). See our How to sell your property guide for the all the costs involved with selling up.
Quick questions:
Is there a fee for changing whose name is on a mortgage?
Yes, fees normally apply if you want to change whose name is on the mortgage. Typically there are three:
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Legal fees. Paid to a solicitor to cover the cost of the legal work involved.
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Registration fees. Paid to the Land Registry so the land register can be updated.
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Lender fees. Some lenders charge a fee for changing whose name is on a mortgage (not all do, so you might not have to pay this).
Each of these fees typically costs £100s, with legal fees likely to be the biggest outlay, so it's quite possible changing the name on a mortgage will set you back over £1,000.
Do early repayment charges apply if I change whose name is on the mortgage?
An repayment charge (ERC) might apply if you make changes to your mortgage, though not necessarily
For example, if your lender doesn't agree to you being the only name on the mortgage, you may have to consider applying for a new mortgage from a different lender instead or selling your home. With both these options, if you're currently locked into a mortgage deal – such as a two-year tracker or five-year fix – you'll probably have to pay an ERC to ditch the deal early.
Even where your current lender agrees to remove your partner's name from the mortgage, it might still treat it as a remortgage. If so and you're in the middle of a mortgage deal, it's likely you'll be hit with an ERC.
ERCs easily set you back £1,000s, so watch out.
Will I have to pay stamp duty to buy out my partner?
There are some circumstances in England and Northern Ireland where you'll need to pay stamp duty if you buy out your partner.
If you're married or in a civil partnership then stamp duty doesn't normally apply. But if you're just cohabiting then it's more complicated and more likely that stamp duty will apply. Whether or not you have to pay it depends on two things:
- How much it costs to buy out your partner.
- Your outstanding mortgage balance.
Specifically, if the combined cost of how much you must pay to buy out your partner plus HALF the outstanding balance on your joint mortgage is greater than £250,000 (the current stamp duty threshold), then stamp duty will be payable. Here's an example:
If you paid £100,000 cash to buy out your partner and the outstanding mortgage balance was £400,000, then the total stamp duty consideration would be £300,000 (so £100,000 plus half the outstanding balance of £200,000).
No stamp duty is payable on the first £250,000 of a main residential property purchase, while 5% would be due on the portion between £250,000 and £300,000. Therefore you'd have to pay £2,500 in stamp duty to buy out your partner.
Stamp duty can be very complicated when it comes to buying out a partner, so if you're unsure it's worth chatting to a conveyancing solicitor. For more on how stamp duty works in general, see our Stamp duty guide.
Removing yourself from a joint mortgage: real examples
Removing yourself or a partner from a joint mortgage is not a straightforward process at the best of times. Where things aren't amicable between you, it can be really difficult – potentially leaving both your names stuck on the mortgage in the meantime (which comes with its own risks).
Here are a few examples from the MoneySavingExpert forum of forumites finding it difficult to extricate themselves from a joint mortgage:
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'Stuck on a joint mortgage even though I moved out 16 years ago'
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'Want to buy out my partner but no guarantee I'll pass affordability test'
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'Stuck on a joint mortgage and trying to get another mortgage elsewhere'
Where can I get help with my mortgage after separation?
Paying a mortgage can be a challenge where there are two incomes contributing. If you're attempting it alone, it's even tougher.
Regardless of the current situation with your partner though, if you're finding it tough to manage the mortgage repayments there are ways to ease the pressure. Full details in our Struggling to pay your mortgage? guide, but in brief here are some steps to consider:
1) Reassess your finances
The first thing to try is a deep-dive into your existing finances by:
Do a budget. Use our free Budget planner and see our Money makeover guide to trim costs.
Check your benefits entitlement. Our 10-minute benefits checker can help with this.
Claim on mortgage insurance. Such asmortgage payment protection (if you've got it).
Claim 'Support for Mortgage Interest'. Government support is available for some.
2. Check if new 'mortgage charter' support can help
If you need extra help, the next step is to explore 'mortgage charter' support. The charter is designed to enable lenders to offer flexible, short-term support if you're struggling with mortgage repayments but not yet in arrears.
Full details in our Struggling with your mortgage? guide, but in brief:
- You can EITHER switch to interest-only payments OR extend your mortgage term.
- Neither option will have an adverse impact on your credit history.
- Both options will make your mortgage more expensive in the long-run.
3. Ask what 'tailored support' your lender offers
As it's vital not to miss a mortgage repayment, if you've tried the measures above but you're still struggling then it's time to reach out to ask your lender about 'tailored support'. More detail about what tailored support could involve in our Struggling with your mortgage? guide.
4. Consider selling your home
If you've exhausted the options above and you're still struggling with your mortgage repayments, it could be time to consider selling your home. The sale proceeds can be used to repay the mortgage in full – so no more mortgage repayments – and any cash left over can be kept.
Where you decide to sell, bear in mind it can be a complicated and stressful process, plus you'll need to find somewhere else to live. More details about what it involves in our How to sell your property guide.
Joint mortgage separation FAQs
Can I remove somebody from the mortgage without their permission?
You'll usually need a person's permission before you can remove their name from a mortgage – unless it's been ordered by a court. If you want to remove your partner's name from a joint mortgage it's best to discuss the idea first.
Can I buy out my partner if we're in negative equity?
'Negative equity' means the size of your mortgage is bigger than the value of your home. This can happen if the value of your home drops significantly.
Being in negative equity can it much harder to buy a partner out, as a lender is less likely to agree to change the terms of your mortgage or accept you for a remortgage. Even if you ultimately opt to sell up, the sale proceeds would not necessarily clear your mortgage debt in full, so you and your partner would need to consider how you'd make up the shortfall.
Negative equity is a tricky situation which can make you feel like you're stuck (as this forumite sadly found out). If you're impacted, speak with your lender and a mortgage broker about the options available.
Can my name be on two mortgages?
It's possible for your name to be on more than one mortgage simultaneously. However, as lenders carry out strict checks to assess whether you can afford to repay a mortgage, if your name is already on one mortgage it will make it harder to prove your affordability for another.
Can I jointly own a property but not be on the mortgage?
Where a property is mortgaged, any names on the property's title deeds must appear on the mortgage too. This means if you were to remove your partner's name from the joint mortgage their name would have to come off the property's title deeds too. In other words, they'd have to transfer their share of the property to you.
Do note that while you can't appear on a mortgaged property's title deeds without also being named on the mortgage, it is possible for lenders to allow a name to appear on a mortgage but not on the property's title deeds (for example, in the case of a joint borrower, sole proprietor mortgage).
What does 'joint borrower, sole proprietor' mean?
The term 'joint borrower, sole proprietor' (JBSP) refers to a particular type of mortgage. It's very similar to a guarantor mortgage, though lenders usually offer one or the other.
With both types, only one person owns the property but the lender takes two incomes into account for the purpose of the affordability. The main difference is that with a guarantor mortgage, the guarantor – normally a close family member – is only obliged to cover the mortgage repayments in the event the main borrower is unable to do so, while with JBSP the joint borrower is jointly and severally liable for ensuring repayments are made on time.
What should I do if my partner stops contributing to the joint mortgage?
If you're struggling to repay the joint mortgage because your partner has stopped contributing, it's important to reach out to your lender and explain the situation. Ask whether there is any temporary support available which could help – even if there isn't, it's important to show you made the lender aware of what's going on.
For a full list of options if you're finding it tough to meet your monthly mortgage payments, see our Struggling to pay your mortgage? guide.
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