Mortgages and separation

What happens to your mortgage after your separate?

Separations are never easy, but when they involve a jointly owned property there is an additional administrative burden to take care of. If you find yourself in this situation, here are answers to some of the common questions people have.

Who is liable to pay the mortgage after a separation?

If you have a joint mortgage with another person, both of you are (in legal terminology) ‘jointly and severally liable’ for that mortgage. It makes no difference if you’re married, in a civil partnership, or simply living together; both individuals can be held responsible for the repayment of the mortgage.

What happens if you stop paying?

If the mortgage provider doesn’t receive full payments, it will hold both individuals responsible and can pursue both or either for repayment.

What happens if your ex-partner stops paying?

The same applies if your partner stops making repayments. The mortgage provider can hold you responsible for missed payments, even if you paid your share.

Will this affect your credit score?

Yes. Any joint debts, including your mortgage, will be recorded on both individual’s credit scores. This may affect your ability to obtain a mortgage or other loan in the future.

How can you repay a mortgage after separation?

You typically have two options:

  1. Sell the property and move out to pay off the mortgage, splitting any profits equally (or in proportion to how much you both paid into the property).
  2. One partner remains in the property, buying the other partner’s share so that they can move into another property. The mortgage will then be in just one person’s name.

You’ll need to agree on an approach with your ex-partner, and with your mortgage provider. They will need to see evidence that the person who remains on the mortgage can afford the repayments alone.

How can you afford to buy your ex-partner’s share?

You’ll likely need to remortgage the property to free up the cash to buy out your ex-partner. Speaking to a mortgage broker can help you to establish if you can afford to do so and to find the best deal.

What if you don’t own the property?

If you live in a property that is only in your ex-partner’s name, the situation differs depending on your marital status. If you are married, you have a legal right to a share of the property even if they own it alone, which will be negotiated as part of your divorce settlement. If you are in a civil partnership or are unmarried, you don’t automatically have this right.

How can unmarried couples protect their assets?

Unmarried couples who want to jointly buy a property can sign a cohabitation agreement to outline how your assets will be divided if you separate, including those owned at the start of the relationship, and any acquired during the relationship.

All Rights Reserved. Information contained in this article and on our website does not constitute advice and is provided for information purposes only. Recipients should not act upon it, but should seek professional advice relevant to their own situation.