Divorce and Mortgages: Dealing with Mortgage After Separation

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.

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.

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.

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.

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.

Yes, if both parties agree, you can keep a joint mortgage after divorce. This means that even if you're separated and living at different addresses you can still both be on the mortgage and title deeds. Some people may choose to do this if, for example, they have children together and one partner is to remain in the family home with them.

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.

Remortgaging your home after separation can allow you to release equity to buy out your ex from your joint mortgage. This will allow you to replace the old mortgage with a new one not in their name. You can get a remortgage deal 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 mortgage affordability criteria by yourself.

To be eligible for remortgaging after divorce or separation, 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.

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.

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.

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.