What options do I have if I separate from my partner?
Whether yo are married, in a registered partnership, or living together, how the home ownership and mortgage responsibilities are divided depends on your legal agreements—such as a prenup or cohabitation contract.
Sell your home and repay the mortgage
This is one of the most common options when you separate and have a mortgage based on combined income. You sell the home and use the proceeds to repay the mortgage.
If you have built equity, the profit is shared between you and your partner according to your agreement. If you decide to buy a new home, you will most likely need a new mortgage.
To approve this, lenders typically require a copy of your divorce agreement, which outlines how your finances are arranged, including any alimony payments if applicable. For this reason, it is both wise and necessary to finalize your divorce before applying for a new mortgage.
Divorce and your mortgage – how OAHO makes it easier
Divorce is difficult enough without having to worry about a mortgage. Whether to sell the house, refinance, or have one partner take over the loan, many people are feeling owewealmed.
At OAHO, we guide you through every step of your divorce and mortgage process, helping you understand your financial options and manage your new mortgage application.
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What options do I have if I want to keep my property?
Take over your partner’s mortgage
Another option is for one partner to stay in the house and take over the mortgage alone. This is called a release from joint liability.
Start by determining the current value of the house. This can be done through an appraisal, checking the official WOZ value, or reviewing recent sale prices of similar properties nearby.
Then, find out the remaining mortgage balance. The difference between the house value and mortgage balance is the equity, or negative equity if the mortgage is higher than the house value.
If one partner stays, the mortgage transfers to their name. The lender must approve this and check if that person’s income is enough to cover the full mortgage.
The partner who stays usually buys out the other’s share of the equity, either using savings, increasing the mortgage, or both. If the mortgage increases, the lender must agree and confirm that the borrower can handle the higher payments.
A notary prepares a division deed and updates the ownership at the land registry.
If the lender does not approve the transfer, you agree on temporary arrangements—such as deciding whether to sell the house later and how to split ongoing costs like mortgage payments and utilities until then.
Can I keep the mortgage as it is?
Yes, the mortgage can stay the same
It is possible that the partner staying in the house cannot afford the mortgage payments alone, but you still want to keep the property for now—perhaps until the children move out. In this situation, you can agree to remain co-owners and continue paying the mortgage together.
If one partner moves out, they are entitled to the mortgage interest deduction for only two more years. If you agree that one partner pays the full interest and loses the deduction, the paid interest can be declared as alimony to the tax authorities. For more information, contact our mortgage advisors.
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