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 to a 'guarantor' mortgage. Here, someone like a close family member agrees to be your guarantor, making them legally liable for your mortgage in the event you can't pay. Some lenders want the guarantor to be named on the mortgage, meaning the guarantor might have to play a more active role. Not all lenders offer guarantor mortgages, but a mortgage broker can tell you which do.
What if I'm not able to buy out my partner?
If buying out your ex isn't feasible, you'll have to consider the alternatives, which include:
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Continue with both names on the mortgage. In other words, leave things as they are. This could be a temporary fix while you consider what's best to do in the long run. Remember, you'll both remain responsible for the mortgage in the meantime.
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Take in a tenant and change your mortgage to a buy-to-let. In the scenario you're not willing to sell your home 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 cover your mortgage payments.
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Sell your home and repay the mortgage in full. In other words, 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 on, this can help you to financially delink from your ex.
- Boost future mortgage acceptance. You'll both have a better chance of being accepted for another mortgage in future if you're not associated with an existing mortgage.
Be careful of selling up and paying off your mortgage if you're in the middle of a mortgage deal – for example, halfway through a five-year fixed deal – as you'll likely be stung by an early repayment charge (something that can cost £1,000s).
Real examples: removing a name from a joint mortgage
Removing someone from a joint mortgage is not a straightforward process at the best of times. Where things aren't amicable, it can be really difficult – potentially leaving both names stuck on the mortgage in the meantime (which comes with its own risks).
There are plenty of real-life examples on the MoneySavingExpert forum of forumites finding it difficult to extricate themselves from a joint mortgage, which may be useful to read.
Quick questions:
Is there a fee for changing the name on a mortgage?
Normally it will cost to change the name on a mortgage. Typically you'll pay:
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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 to update the land register.
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Lender fees. Some mortgage lenders charge a fee, though not all do.
Each of these fees is likely to be in the £100s, with legal fees the biggest. So it's possible changing the name on a mortgage will set you back by £1,000+.
Will I pay an early repayment charge to change the name on a mortgage?
An repayment charge (ERC) may apply if you change the name on a mortgage.
For example, if your lender won't allow you to change your mortgage, you may opt to apply for a new mortgage from a different lender entirely, or sell your home. But if you're in the middle of a mortgage deal – such as five-year fixed rate – you'll probably have to pay an ERC to ditch it early.
Even if your current lender agrees to amend your mortgage, it may still treat it as a remortgage – so you may face an ERC if you're in the middle of a deal.
ERCs can easily set you back £1,000s, so watch out.
Will I pay Stamp Duty to buy out an ex?
There are some scenarios where you'll pay Stamp Duty to buy out an ex.
If you're married or in a civil partnership, then Stamp Duty doesn't normally apply. But if you're cohabiting then it's more complicated and more likely that you'll pay Stamp Duty – whether you will depends on two things:
- How much it costs to buy out your partner.
- Your outstanding mortgage balance.
Specifically, if the amount you pay to buy out your ex, plus half your outstanding mortgage balance, is greater than £125,000 (the current Stamp Duty threshold in England and Northern Ireland), then Stamp Duty will apply.
Here's an example of how it works:
If you pay £100,000 to buy out your ex and the amount left on your mortgage is £400,000, then the total Stamp Duty consideration is £300,000 (so £100,000, plus half the outstanding balance, which is £200,000).
No Stamp Duty is payable on the first £125,000, while 2% is due on the amount between £125,000 and £300,000.
So you'd pay £5,000 in Stamp Duty to buy out your ex.
Stamp Duty can be very complicated in relation to buying out an ex, so if you're unsure it's worth speaking with a conveyancing solicitor.
For more on how Stamp Duty works in general, see our Stamp duty guide.
Getting help with a mortgage after separation
Paying a mortgage can be a challenge even if two of you are contributing. Where you're alone, it's really tough.
If you're struggling to pay the mortgage each month, there are ways you can ease the pressure. Full details are in our Struggling to pay your mortgage? guide, but in brief:
Option 1. Reassess your finances
The first thing to try is a deep-dive into your existing finances by:
Do a budget. Our free Budget planner and Money makeover guide can help trim costs.
Check your benefits entitlement. Our 10-minute benefits checker can help with this.
Claim on mortgage insurance (if you've got it). Like mortgage payment protection.
Claim 'Support for Mortgage Interest'. Government support is available for some.
Option 2. Check if 'mortgage charter' support can help
If you need help even after reassessing your finances, 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.
Option 3. Ask what 'tailored support' your lender offers
Not missing a mortgage payment is vital. So if you've tried the measures above and you're still struggling, then ask your lender what 'tailored support' it might be able to offer.
Option 4. Consider selling your home
If you've exhausted the options above, it may be time to consider selling your home. The sale proceeds can be used to clear the mortgage in full and any proceeds left over kept.
Bear in mind that selling a property can be complicated and stressful, plus you'll need to find somewhere else to live. More details on the process in our How to sell your property guide.
Joint mortgage separation FAQs
Do I need my ex's permission to amend the mortgage?
You'll usually need an ex's permission to remove their name from the mortgage – unless it's been ordered by a court. So it's best to discuss the idea first before trying to make any formal changes.
Can I change the mortgage if we're in negative equity?
'Negative equity' is where your mortgage is bigger than the value of your home. This may happen if the value of your home drops significantly.
Negative equity can make it harder to buy out an ex, as lenders are less likely to approve a change in mortgage terms or accept you for a remortgage. Even if you sell your home, the proceeds may not clear the mortgage in full, so you'd need to think of how to make up the shortfall.
Negative equity is a tricky situation where it can feel like you're stuck. If you're in this situation, speak with your lender or a mortgage broker.
Can my name be on two mortgages?
Your name can be on more than one mortgage at the same time. But as lenders carry out strict affordability checks, if your name is already on one mortgage it will make it harder to prove your affordability for another.
Can I 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. So if you were to remove an ex from the mortgage their name would have to come off the title deeds too (in other words, they'd have to give up joint ownership of the property).
However, while you can't be on a mortgaged property's title deeds without being on the mortgage, you can be on the mortgage but not on the title deeds (for example, a joint borrower, sole proprietor mortgage).
What does 'joint borrower, sole proprietor' mean?
The term 'joint borrower, sole proprietor' (JBSP) refers to a type of mortgage that's similar to a guarantor mortgage.
With both types, only one person owns the property but the lender takes two incomes into account for the purpose of affordability. The main difference is that with a guarantor mortgage, the guarantor is only obliged to cover the mortgage payments if the main borrower can't, while with JBSP the joint borrower is jointly responsible for the payments.
What if my ex stops contributing to the mortgage?
If you're struggling with the mortgage because your ex has stopped contributing, it's important to contact your lender. Ask if support is available – even if there isn't, making your lender aware will help.
For detailed help if you're finding it tough to meet your monthly mortgage payments, see our Struggling to pay your mortgage? guide.
What about joint mortgages with family and friends?
Joint mortgages are not just for romantic couples. But regardless of who you've got a joint mortgage with, the technicalities, practicalities and financial restraints described in this guide still apply.
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