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HomeMortgage Help GuidesBuying a partner out from a mortgage

Buying a partner out from a mortgage

Last updated on 25th August 2023 by Martin Alexander

Splitting from a partner can be difficult in more ways than one. While separating can take a toll on your personal life, arranging your finances after separation is often a struggle. Buying a partner out from a mortgage isn’t something you’d do often, so it’s understandable if you’re unsure what to do.

A mortgage buyout can be made easier if you and your ex-partner are on amicable terms. On the other hand, if things have turned sour, buying your partner out of a mortgage can be difficult.

We’ll cover each scenario in this guide to explain everything you need to know about mortgage buyouts. Furthermore, our advisors can help you with any questions you have.

First steps to take when buying a partner out from a mortgage

It’s important to understand that when you have a joint mortgage, each person named on a mortgage is responsible for repaying it. Even if you or your partner have moved out, mortgage payments must continue as they were. This is until a separate and formal arrangement has been agreed upon.

Failing to repay your mortgage while you’re still part of a joint mortgage can result in you being repossessed which will also affect your credit score. Whether you want to remove yourself or your partner from the mortgage, the process must be done in the correct manner.

When buying a partner out from a mortgage, the first thing to do is to calculate what they’re owed.

Calculating what your partner is owed

If you’re buying your ex-partner out, you’d typically need to pay them half of what equity you both have in your home. This isn’t always the case, as you may have contributed more towards the mortgage deposit or vice versa. This is something you’ll have to agree on with your partner.

Nonetheless, calculating the amount of equity in a property is rarely up for debate. To calculate your equity amount, you’ll first have to assess how much your home is worth. It’s quite easy to get a valuation from an estate agent or a formal valuation from a chartered surveyor. Valuations from estate agents are often free but may lack credibility in comparison with a paid valuation from a surveyor.

Once you have your valuation, simply deduct the mortgage amount you owe to find out how much equity you have. You’ll then owe your partner around half of this figure if you wish to buy them out from the mortgage. For instance, if your property is worth £250,000 and you have an outstanding mortgage balance of £100,000, you’d have £150,000 equity. You’d then owe your partner approximately £75,000 to buy them out.

Your partner may also insist they’re reimbursed for their part of the deposit in addition to half of the equity in your home. The split of equity isn’t always half, as you may have paid more toward the property at the outset. Having proof of this also helps if there are any disputes.

You can agree yourselves if you can, or you could consult a solicitor should a dispute arise. Once you’ve paid your partner, they’ll be removed from the mortgage. Formally, this is known as a transfer of equity or a mortgage transfer.

Can I remortgage to buy my partner out?

Circumstances in life can often change, and it’s likely you weren’t planning on separating from your partner after buying a home together. As a result, you may not have the finances to buy your partner out.

If you don’t have surplus capital, you may be able to remortgage to buy your partner out. For instance, if you have £150,000 of equity and your property is worth £250,000, you may be able to remortgage to release some equity. You can then use the funds to buy your partner out and remove them from the mortgage.

If you choose this option, your monthly mortgage payments will likely be higher than you pay now. This is because your loan amount will increase. Nonetheless, what you pay each month may not be that different. This depends on the rate you’re on now compared to the new deal you’re offered.

You may also struggle to get a mortgage as a single applicant, especially if your income is low. If you have another person you’d like to add to the mortgage, it may become easier to pass the affordability checks. Nonetheless, this is unique to your circumstances, and you may have no issues with affordability.

I can’t afford to buy my partner out

If you’re unable to remortgage or you don’t have enough savings to buy your partner out, there are other alternatives to consider.

The first alternative is an obvious option, which is to sell the home. Once the property is sold, you can split the proceeds with your partner and go your own way. Selling a property can take a while, and if you aren’t on speaking terms with your partner, it can certainly cause issues and delays.

Selling may be counterintuitive, as you perhaps want to stay in your home due to the location or other reasons. Another option is to get a second charge on your home, which is another alternative to a remortgage.

Getting a second charge as a buyout solution

A second charge is often referred to as a secured loan. The loan is added to your initial mortgage, so costs can soon accumulate. It’s important to consult an advisor before proceeding with this option. We’ll then check whether a secured loan is a viable option for you to take.

There are other options, such as getting help from a guarantor. Our advisors can assess your situation and finances to guide you on the best route to buying your partner out.

Irrespective of the options you choose, separating from a joint mortgage in the correct manner is crucial. This is because as long as you and a partner share a mortgage or any financial agreement, your credit files are also linked. So, if your partner gets into financial difficulty, your credit file can also be affected. That’s why it makes financial sense to make sure everything is split accordingly.

Specialists for mortgage buyout solutions

Buying a partner out of a mortgage can be very difficult, especially if you’re unsure of what to do. This can be made further difficult if your partner isn’t willing to communicate with you.

Each person’s situation will vary. Kids may be involved, or you might pay a considerably larger share of the mortgage than your partner. Getting the right mortgage advice is crucial, especially when separating from a partner.

Our advisors specialise in mortgage buyout solutions, as well as mortgage transfers. We’ll guide you through the process while protecting your mortgage interests.

About the author

Martin Alexander
Senior Mortgage Advisor

Martin is a senior mortgage advisor who has held a CeMAP qualification for over 15 years while completing an MBA in Global Banking and Finance.