What to do with a joint mortgage during divorce or separation

At a glance

• Do not stop paying your mortgage. If you are in a joint mortgage, you are both equally liable to keep up with the repayments even if one of you no longer resides in the property.
• Talk to your mortgage lender at the earliest opportunity to advise them of the situation. It’s highly likely they can offer you options on what to do next with your mortgage.
• If you cannot agree on what to do with your home or mortgage, then you can ask a court to decide. In such circumstances, getting legal help is a must.

Divorce or separation from a long-term partner can be a traumatic experience, and if you and your ex-partner have a joint mortgage, it can add additional strain during an already stressful time.

To help you understand the basics of what to do during a divorce or separation if both partners are named on the mortgage, we’ve put together the following guide to make things a little clearer and, hopefully, a little easier for all concerned.

What happens to a joint mortgage when you divorce?

Whatever happens – keep up your repayments. The mortgage remains in place until you make other arrangements, and even if you’re no longer living in the property, you’re jointly responsible for making sure all payments are made. Moving out of the home does not remove you from this legal obligation.

Note that each individual is equally responsible for the full mortgage payment, not just their share. This means that if your ex doesn’t pay their half (for example), this will affect your credit score even if you pay your share, and you’ll be responsible for making sure the remaining amount is covered.

Contact your lender

You should get in touch with your mortgage lender as soon as possible to update them on your current circumstances, especially if there are issues with repayments. Of course, not all splits are amicable, and it might be that your partner is now refusing to pay their share on a joint mortgage or there is some other problem with your repayments.

Don’t wait until payments start being missed – get in touch with your lender straight away and explain the situation, as they may be able to offer additional support to help you through the process. Lenders who don’t know why the repayments have stopped can’t do anything to help, and the vast majority will appreciate early notice of any potential problems.

Can you keep a joint mortgage after divorce?

Yes – if you’re both happy keeping the mortgage in place and continuing to make repayments as normal, then there’s nothing stopping you from keeping a joint mortgage after divorce, even if one of you moves out.

This could be a possibility if you have children and one of you wants to stay in the family home, for example, or if you’ve almost paid off the mortgage and want to keep it simple by both continuing to make payments until it’s cleared.

This also means that the party who moves out will retain a stake in the property, and so will benefit when the property is eventually sold. But before then they’ll still be named on the mortgage, and so will be expected to continue making repayments.

What to do with your mortgage after divorce or separation

If you don’t want to carry on paying the mortgage jointly, your main options are:

Take over the mortgage yourself

If you are financially able, you might want to assume sole ownership of the property, taking on all the mortgage payments so you can remain living in your home. In this case you’ll need to ‘buy out’ your ex-partner, which is where you remove them from the deeds and mortgage and arrange for a transfer of equity.

To do this you’ll need an up-to-date and independent valuation of your home to determine how much it’s currently worth, and you’ll need to undergo affordability checks to ensure you can afford the mortgage on your own (our repayment calculator can help you get an idea of what your potential repayments could be).

It’s important to consider if you’ll need to borrow more in order to buy out your ex – perhaps through a further advance from your current lender or by remortgaging with a larger borrowing amount – and how this will impact your affordability metrics.

You’ll also need to work out what proportion of the house your ex-partner is entitled to. Bear in mind that not everything can be split 50/50, and if your partner has been paying more or less towards the mortgage, this can affect the proportions.

If you can’t agree a mutually acceptable figure, you may have to go to mediation or even ask a court to decide, but make sure you’ve got appropriate legal help if you’re going down this route (if money is a problem, you’ll find that free advice services, such as Citizens Advice, can offer support).

Once you (or the court) have decided how your property is to be split, you can arrange a mortgage to buy out the other party and assume sole responsibility for repayments.

Get bought out of the mortgage by your ex-partner

On the flip side, you might be in the position of being bought out by your ex-partner. As above, you’ll need to agree what a fair percentage of the property is that you own, either by mutual agreement, mediation or court if you can’t decide between you.

Once you have been paid off and your proportion of the joint mortgage is formally assumed by your ex-partner (by way of a deed issued by the lender), you will be freed from all further repayments. You will no longer be on the mortgage and so from here, you can think about buying a new home and organising a new mortgage deal, or arranging other accommodation such as renting.

Sell up and go your separate ways

This option is perhaps most likely for couples who don’t have children, and is where you both agree to sell your former home, repay the mortgage and move on. Any money that you make after your home has been sold and the mortgage repaid can be split between you, but make sure to consider the fees and weigh up the costs involved.

Again, the only potential stumbling block is if either of you feels that a 50/50 split is not fair, in which case you have the choice of agreeing a figure that you are both happy with or, if you cannot, going to mediation or asking a court to decide. In any case, once the mortgage is repaid, you are now free to think about obtaining a mortgage on a new property as a single applicant or to consider alternative options.

It’s important to remember that when you have a joint mortgage, your credit score will be linked to the other person’s – and so when you separate, it’s vital to remove them from your credit report and cut all financial ties. You’ll need to contact the individual credit reference agencies in order to do this, and will need to prove that your financial association has ended. You’ll do this through a “notice of disassociation”.

Rent out the property

A final option could be renting out the property after you both move out. This could be a solution if neither of you want to sell, perhaps in order to benefit from future house price rises.

You’ll need to speak to your lender to see if you can switch to a buy-to-let mortgage, but remember that this means you’ll still be jointly responsible for the mortgage payments. It’s also important to consider the other costs and tax implications of going down this route – if you want to buy another property you’ll have higher-rate stamp duty to pay, for example – so make sure to speak to a broker to see if this is the right decision.

Resolving any disputes

If the breakup of your marriage, partnership or long-term relationship is amicable then this can go a long way to making things easier when dealing with a mortgage you no longer wish to pay jointly, but this of course isn’t always the case.

You may disagree over the share of the house you’re both entitled to – perhaps if one of you put down a larger deposit or paid more each month, for example – or if one of you wants to stay in the property and the other wants to sell up. You’ll also need to consider other assets and how they factor into a wider settlement, particularly things like pensions, and it could also be more complicated if you’re in retirement or if there are children involved.

If you’re unable to settle things between you, you’ll likely need to get the courts involved, and legal advice is a must. You may need to consider things like a Mesher or Martin Order – both are property settlement orders that allow one party to stay in the marital home until a pre-agreed time, such as remarriage or children leaving home – but it can become incredibly complex. Getting independent advice is essential to ensure the situation is resolved legally and fairly for all concerned.

Consider related expenses

As with buying or selling any home, there will be many related expenses and legal formalities to consider. Unless you can find a new mortgage deal that covers them, any property sale will involve both valuation and legal fees, and there may also be land registry fees and extra charges to change the names on deeds, etc.

These should be discussed and agreed before the sale or transfer of the property is completed. Being unable to come to a mutual agreement will again result in having to go to mediation or asking a court to decide.

What if my house is in negative equity?

Being in negative equity brings several problems when divorcing. This is because the sale of the house won’t raise enough money to pay off the mortgage in full, which means you and your ex-partner will have to agree on a way to split the debt.

If the split is an amicable one, you may both agree to keep up your joint mortgage repayments until market conditions improve and the house price increases. Once it has left negative equity you can then proceed with selling the property and splitting any money left over. But things can get a lot more complicated if one of you wants to stay in the home by buying out the other partner, and you’ll need to speak to both your lender and solicitor to come up with a solution.

It’s important to remember that as you are in a joint mortgage, you are both equally liable for the repayments. You cannot stop paying your share, even if you are not living at the property anymore. In a similar vein, you cannot stop making payments even if your partner ceases to contribute – again, remember that you are equally liable to make sure repayments are made, and failure to keep with them can lead to you losing your home.

The most important thing is that you speak to your current mortgage provider at the earliest possible opportunity. Most lenders are sympathetic with this situation and have established procedures in place to help, such as offering a payment holiday to get you over a difficult patch, or options for remortgaging or taking out a new deal. That kind of support can be key, helping you navigate this period as simply as possible.