Divorce and Mortgages: an Overview

A divorce is something most people don’t expect to go through, so it makes sense they don’t plan their mortgage around that eventuality. Fortunately, there are solutions. We’ll walk you through your options in this guide.

Divorce is one of the more stressful reasons for changing your mortgage arrangements. It’s a very personal process which can turn out rather expensive. Divorce usually results in the redistribution of assets and income. Often, the former marital home is sold, with both partners seeking somewhere else to live.

We always recommend that both partners seek independent financial planning and tax advice to make sure the best outcome is achieved. It’s also important to look carefully at the divorce and mortgage arrangements available to you and to consider all of your options.

How Do You Deal with a Mortgage After Divorce?

People get divorced all the time. In fact, there were 30,154 divorce petitions made during January to March 2022 in the UK alone. It’s a common occurrence, yet many people don’t actually know what happens to their mortgage after they divorce. We’ve outlined some of the main options and frequently asked questions on mortgages and divorce below.

Can You Get Divorced if You Have A Joint Mortgage?

Having a joint mortgage won't prevent you from getting divorced. However, both your names will remain on the mortgage and you and your ex-spouse will be equally responsible for continuing to meet the monthly payments until you reach a financial settlement and put another arrangement in place.

If you plan to get divorced, let your mortgage lender know immediately to discuss what options are available for dealing with mortgage payments. Your lender may be able to offer a repayment holiday or an extension of the mortgage term to help you make the payments in the short term. You may still have to consider refinancing or downsizing in the long term.

The most important thing is that you make your monthly payments, even if one of you has moved out of the property, as failure to make the payments could result in repossession of the property and would have a detrimental impact on both of your credit scores.

Who Pays a Joint Mortgage After a Separation?

After separation, both parties remain legally responsible for paying a joint mortgage unless a formal agreement has been made between you and your ex-spouse. While it may be an emotional time, you must keep up with your mortgage payments, even as you're working through the details of your separation. If one partner refuses to meet the mortgage payments you must speak to your lender as soon as possible as they may be able to present you with some options.

Keeping the Property and Transferring Ownership

You may agree to keep the property within the family once the divorce has been settled, perhaps to ensure your children can still grow up in their home, or simply because one of you wants to stay there. If you decide to do this, you’ll need to transfer ownership of the property into one person's name.

You can have one party removed from the title deeds so that the property is transferred from joint to sole ownership via a transfer of equity. This will enable your lender to remove said party from the mortgage, assuming the remaining party meets the lender’s affordability criteria. 

A transfer of equity can also be used if you want someone else to replace your ex-partner on the title deeds and mortgage. Adding a new person to the mortgage can make it easier to meet the lender’s affordability criteria.

You’ll want to speak to your lender and your solicitor about this. It’s simpler if both original parties agree to a transfer of equity before talking to the lender but if this isn’t the case, both parties will need to consult solicitors about establishing ownership of the property.

Removing Your Name from a Mortgage or Deed

If you're moving out of the home, you may want to take your name off the mortgage and deed of the property. Bear in mind that you’ll need to be removed from the title deeds if you wish to be removed from the mortgage. Typical routes include a transfer of equity, receiving a lump sum buyout from the party retaining the property or selling the property.

If you want to remove your name from a property’s title deed, you must complete an AP1 form and sign the transfer deed (TR1) form. You then need to send all completed forms to HM Land Registry. Your solicitor may be able to help with this process. You’ll have to obtain the lender’s permission if a mortgage still exists on the property.

Speak to your lender and solicitor regarding your options.

Buying Out Your Ex-Partner

If you want to keep your home but your ex-partner is entitled to some equity in the property, they may require a buy out before relinquishing ownership. 

Your ex may be entitled to some equity in the property if they contributed to monthly payments and/or deposit and/or they helped pay for improvements to the property. 

In this situation, the funds may come from an amicable settlement, or refinancing the property and releasing equity.

  • Reach an amicable settlement - if your marital home is mortgage-free and you wish to stay in your house after your partner moves out, you may want to try and reach an agreement whereby you pay them a lump sum based on the share of the property they have. Once the payment is made they can be immediately removed from the title deeds
  • Remortgage in your name only -  if you choose to remortgage you can release equity to buy out your ex-partner. Bear in mind this could increase the cost of your mortgage and you will have to meet the lender's affordability criteria. As soon as the remortgage is completed the person leaving will receive the money for their share and their name will be removed from the title deeds. Learn more below

How to Remortgage After Separation

Remortgaging your home can allow you to release equity to buy out your ex-spouse from your joint mortgage. This will allow you to replace the old mortgage with a new one not in their name. You can remortgage in your name only or have someone else brought on to the new mortgage to replace your ex-partner. What’s right for you will depend on your situation and whether you meet the lender’s affordability criteria by yourself.

To be eligible for remortgaging, you'll need to meet criteria such as income requirements, creditworthiness, age and more - as you would with any mortgage. Note that your new mortgage may come with different terms from your old one, such as rates, mortgage terms and facilities. Furthermore, releasing equity to buy out your ex-partner could increase the cost of your mortgage.

Learn more about your remortgage options by speaking to an independent mortgage broker like John Charcol.

Selling Your Home After Divorce

It's common for people to sell their homes after divorce to divide the proceeds and permanently sever financial ties. If both parties in the divorce want to sell, they can sell the property as usual. However, if there is a disagreement over selling the property, a court may be required to intervene to decide on the sale.

Once the home is finally sold, the proceeds are divided according to the agreement reached by both parties or a court order. Note that mortgage repayment penalties and legal fees may apply during the property sale, so you must get appropriate financial and legal advice.

While some people choose to sell their house before a divorce settlement, most will sell the home after their divorce settlement is complete. It makes sense then, that often a spouse will move out of the marital home during divorce proceedings to minimise tension. Note that this doesn’t mean they surrender any rights to the ownership of the property.

Getting Another Mortgage After a Divorce

Is it harder to apply for a mortgage after a divorce? It can be if you’re still on the joint mortgage of your marital home, especially if your ex-spouse fails to keep up with the mortgage repayments.

Some lenders will instantly refuse your mortgage application if you’re already connected to another mortgage. That’s why a mortgage broker can be useful. We can not only find you a lender that we know understands and looks to accept such situations, but we can also find you the best deal for your circumstances.

Can I Be Named on 2 Mortgages?

It’s possible for you to have 2 residential mortgages, although it’s often the maximum accepted by lenders in the UK. Of course, you’ll have to demonstrate to the new lender on the second mortgage that you can afford to pay both mortgages. Your new lender will usually deduct the monthly payments you make towards the original mortgage from your monthly income before deciding the maximum amount you can borrow for a second property.

Can I Use Child Maintenance When Applying for a New Mortgage?

It can be challenging for divorced or separated parents who receive child maintenance to find a prospective mortgage lender that will take child maintenance income into account when reviewing their application. Lenders might be able to incorporate child maintenance payments into overall income. Often, they’ll want to see that the maintenance is paid by a court order via the Child Maintenance Service (CMS) and has more than 5 years to run. If the child maintenance isn't court ordered but is a mutual agreement, some lenders may still be able to take this into consideration providing it's shown on bank statements.

Mortgage and Separation FAQs

Understanding your mortgage options during or following a divorce or separation can be tricky, but that doesn’t make it any less important. John Charcol's team of mortgage experts are here to help. We’ve laid out some of our most frequently asked questions below. If you can’t find what you’re looking for below, then see our Separation or Divorce FAQs section.

Is Everything Split 50:50 in a Divorce or Separation?

It’s a misconception among many people that all assets between couples are split 50:50 during a divorce or separation. Although this may be a starting point, courts have the right to deviate from this ratio if it’s deemed fair and reasonable to do so. This may be for childcare purposes, economic reasons and/or the current and potential earning capacity for each partner.

Do Both Owners Have to Agree to Sell a Home?

If you wish to sell your jointly-owned property and your partner doesn't – or vice versa – the person that wants to sell may undertake an action of Division and Sale in court. The other party can appeal to the court for a division of the proceeds or purchase the property at its market value - or a value agreed by the court. The court can also sanction the sale if the other partner is unable to accept for medical reasons, or if the other partner cannot be located.

Can I Change Our Mortgage to My Sole Name?

To remove a name from the mortgage you'll also need to remove it from the title deeds via a transfer of equity. The lender will then be able to change the joint mortgage to a sole-name mortgage assuming you meet the lender's affordability criteria.

Can My Name Be Taken Off the Mortgage Without My Permission?

Your name can’t be taken off the mortgage without your permission. If the mortgage and property are in joint names, your signature is required to remove you from the mortgage. Even if you agree, your mortgage lender won’t permit it unless your partner meets their standard lending criteria and can afford the mortgage based on their sole salary.

How John Charcol Can Help

Separation or divorce is a challenging but sometimes unavoidable situation for a lot of people. Our independent mortgage brokers are here to relieve some of the pressure and, ultimately, support you on your journey to reach the best possible outcome for your future.

We can:

  • Assist your solicitors and help to finance a transfer of equity
  • Take you through the remortgage process from start to finish – we will also find you the best remortgage deal for your situation
  • Find you a new mortgage for a new property

You can find out more about how separation and divorce can affect your mortgage in Ask the Mortgage Experts.


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