Introduction.
Separation brings difficult decisions, and the home is usually the largest of them.
Whether one of you keeps the property, you sell and split the proceeds, or you agree to delay a sale until the children are older, the mortgage sits at the centre of it. What each of you can realistically borrow often decides which options are open.
This guide explains how lenders look at separating borrowers: buying out a former partner, how maintenance is treated as income, taking a name off a mortgage, and what a mortgage capacity report is and when your solicitor or the court may need one.
We work alongside your family solicitor or mediator and keep everything confidential. We do not give legal or tax advice, and we will tell you when you need it.
Knowing what each of you can borrow before negotiations start helps solicitors and mediators reach a realistic settlement.
01Your options for the home.
There is no single right answer. The best option depends on the equity in the property, what each of you can borrow, and where the children will live.
| Option | How it works |
|---|---|
| One of you buys the other out | One partner keeps the home and takes on the mortgage alone, usually borrowing more to pay the other their share of the equity. |
| Sell and split | The property is sold, the mortgage repaid and the equity divided as agreed or ordered. |
| Delay the sale | One partner stays in the home with the children and the sale happens later, often under a Mesher order. |
| Transfer with no buy-out | The home passes to one partner as part of a wider settlement, for example in exchange for pension rights. |
Questions to answer early
- Can the person keeping the home afford the mortgage alone? Lenders assess one income, plus any maintenance.
- Can the person leaving buy again? Their share of the equity and their own borrowing decide this.
- What is the current deal? Early repayment charges may affect timing.
- Who pays the mortgage in the meantime? Both of you remain liable until the lender agrees otherwise.
Adviser’s note
Keep paying the mortgage while things are agreed. Missed payments affect both of your credit files and can limit your options later.
02Buying out a former partner.
To keep the home, you usually need a new mortgage in your sole name that repays the joint mortgage and pays your former partner their share of the equity.
How the numbers work
| Amount | |
|---|---|
| Property value | £600,000 |
| Existing joint mortgage | £280,000 |
| Equity | £320,000 |
| Former partner’s 50% share | £160,000 |
| New sole mortgage | £440,000 |
Illustrative. Legal costs and any product fees are extra. The split may not be 50/50.
What the lender needs to see
- That you can afford the full mortgage on your own income, including any maintenance you will receive
- The agreed split, usually in a consent order or separation agreement
- A valuation of the property
- How any shortfall will be funded, if the mortgage alone does not cover the buy-out
Stay with your lender or move?
Your current lender may allow a transfer of equity with extra borrowing. A new lender may offer more, or treat maintenance more generously. We compare both.
03Maintenance and other income.
Many lenders will count maintenance you receive as income, which can make the difference between keeping the home and having to sell.
| Income | How lenders tend to treat it |
|---|---|
| Child maintenance | Often accepted when paid through the Child Maintenance Service or under a court order. Some lenders accept a private arrangement with proof of payments. |
| Spousal maintenance | Usually accepted when set out in a court order, with evidence it is being paid. |
| Child Benefit | Counted by some lenders, often only while the children are young. |
| Pension or investment income | Can be used if it is secure and will continue. |
Lender criteria vary and change often. Most want to see maintenance paid regularly for several months and continuing for a reasonable period.
If you are paying maintenance
Lenders treat maintenance you pay as a commitment, which reduces what you can borrow for your next home. Agreeing the figures before you apply avoids surprises.
In the example on page 10, counting £12,000 a year of maintenance at 4.5 times income raised the borrowing available from £396,000 to £450,000.
Adviser’s note
Bank statements showing maintenance arriving on time are often the most important document in a separation case. Keep them in one place.
04Mortgage capacity reports.
A mortgage capacity report sets out, independently, how much each of you could realistically borrow. Solicitors, mediators and the family court use it to test whether a proposed settlement works.
When you may need one
- Your solicitor asks for evidence of borrowing capacity during financial remedy proceedings
- A proposal depends on one of you keeping the home or buying again
- The two of you disagree about what can be borrowed
- A mediator needs realistic figures to work from
What ours include
- Calculations from several mainstream lenders
- How each income source, including maintenance, has been treated
- Indicative monthly payments and terms
- A clear summary written for solicitors and the court
Independent and realistic
A report is only useful if it reflects what lenders will actually do. We base ours on current lender criteria and your real documents, not on simple income multiples.
If you later go ahead with a mortgage through us, we will explain how the report fee is treated before you instruct us.
05Taking a name off the mortgage.
A joint mortgage makes each of you responsible for the whole debt, not just half. That stays true after you separate until the lender formally releases one of you.
Agree the split
Through a separation agreement, mediation or a court order.
The starting pointCheck affordability
We confirm the remaining borrower can afford the mortgage alone, with or without extra borrowing.
Before anything is signedApply to the lender
A transfer of equity with your current lender, or a remortgage to a new one in a sole name.
Full applicationLegal work
A solicitor transfers the title and the outgoing partner is released from the mortgage.
Land Registry updatedFinancial association
Joint borrowing links your credit files. Once the mortgage and joint accounts are closed, you can ask the credit reference agencies to remove the link.
Never simply move out and stop paying
The lender can pursue either of you for the full amount, and arrears will show on both credit files.
06Stamp duty and capital gains.
Transfers between spouses and civil partners on separation have special tax rules. This is a summary only; your solicitor or a tax adviser should confirm how they apply to you.
Stamp Duty Land Tax
- Transferring a share of the home to a spouse or civil partner under a court order, or an agreement made in connection with divorce or separation, is generally exempt from stamp duty.
- If you buy a new home while you still own part of the former home, the 5% higher rate for additional properties may apply. Special rules can help separating couples.
- Unmarried couples do not get the same exemption.
Capital Gains Tax
- Since April 2023, separating spouses and civil partners can transfer assets between them on a no gain, no loss basis for up to three tax years after the year they stop living together, and at any time under a formal divorce agreement.
- Private residence relief often covers a share of the family home, including for the partner who has moved out, in certain circumstances.
- Buy-to-let and second homes are more likely to give rise to a tax charge.
Adviser’s note
Tax can change the best way to divide property. Raise it with your solicitor before the settlement is finalised.
07Starting again on your own.
For the partner who leaves the home, the next purchase is often the first on a single income. Planning it alongside the settlement makes it far easier.
Your deposit
Your share of the equity usually becomes your deposit. Some lenders will issue a mortgage in principle before the settlement is final, so you know what you can buy.
Your credit file
- Check your credit file with all three agencies
- Close or transfer joint accounts and credit cards
- Register on the electoral roll at your new address
- Remove any financial association once joint debts are cleared
Remaining on the old mortgage
If you are still named on the former home’s mortgage, lenders will count that payment as your commitment. Some will ignore it once there is a court order or agreement that the other party pays it.
Deposits from 5% are available to some buyers, but a larger deposit usually means a lower rate.
Protection
If you have children, review life cover and wills as soon as you can. A new will may be needed, and old policies may name a former partner.
08A buy-out, illustrated.
A parent keeping the family home
A separating couple own a £600,000 home with a £280,000 joint mortgage. One parent wants to stay with the children and buy the other out for £160,000.
- Income
- £88,000 salary, plus £12,000 a year child maintenance
- Needed
- A sole mortgage of £440,000
- Salary alone
- £396,000 at 4.5 times income: £44,000 short
- With maintenance
- £450,000 with a lender that counts it
- Outcome
- Capacity report for both solicitors, consent order agreed, sole mortgage completed with a new lender
This example is illustrative and does not describe a real client.
09Checklist and glossary.
Documents to have ready
- Your latest mortgage statement and current deal end date
- Photo ID and proof of address
- Last three months’ payslips, or accounts and SA302s
- Last three to six months’ bank statements
- Evidence of maintenance: CMS letter, court order or agreement
- Your draft or final consent order or separation agreement
- Details of loans, credit cards and finance, joint and sole
- Your family solicitor’s or mediator’s contact details
Glossary
- Transfer of equity
- Adding or removing a name on the property’s title.
- Consent order
- A court order recording the financial settlement you have agreed.
- Mesher order
- Delays the sale of the home, often until the youngest child turns 18.
- Clean break
- A settlement that ends ongoing financial claims between you.
- Capacity report
- An independent assessment of how much each person could borrow.
- CMS
- The Child Maintenance Service.
- Financial association
- A link between credit files created by joint borrowing.
- Joint and several
- Each borrower is liable for the whole mortgage, not just a share.
Related: Mortgage Capacity Reports · All guides · Calculators