Mortgage UK: Who pays the mortgage after separation? Divorce and joint mortgages explained

When taking out a mortgage, the borrower will get to choose how long they have to pay it off. This term can span a number of years, which, according to the Money Advice Service, is 25 years on average. Some people will take out a joint mortgage, which may become something of a worry should a relationship not work out as planned. Should a couple separate, there are a number of options when it comes to dealing with their joint mortgage.

If a divorce is likely, then the decision to separate finances may also mean looking into stopping a joint mortgage.

This could be done in a number of ways, as the Money Advice Service explains.

First, the former couple may want to consider how they will divide the home.

Sell-up

Parting ways with a property means that both parties may have the money to pay off whatever remains of the mortgage, and hopefully, afford to live elsewhere.

Buy one person out

If one of the homeowners is happy to move out, and the other person has the funds, then buying them out of the home may be preferable.

Agree to keep the home

It may be that the separated couple choose to keep the property, and not alter who owns it.

The Money Advice Service website said: “One partner could continue to live in it, perhaps until your children are 18 or leave school.”

Transfer part of the property value

Another option is to transfer part of the value of the property from one person to there other, in order to ensure that any children they may share have somewhere to live.

“The partner who gave up a share of their ownership rights would keep a stake or ‘interest’ in the home,” Money Advice Service explained.

“This means that when it is sold he or she will receive a percentage of its value.”

Separating a joint mortgage

The Money Advice Service says to speak to the mortgage lender, should someone wish to take over the mortgage in their name alone.

The lender will need to ensure that this person can afford the payments, with the Financial Conduct Authority (FCA) rules requiring lenders to ask in-depth questions and carry out subsequent checks in order to verify this.

Should a person be unable to afford to take over the mortgage, it may be that they’re able to get a “guarantor mortgage”.

This is where a close relative agrees to guarantee the mortgage payments, should the borrower be unable to.

“Becoming a guarantor is a serious legal step as it means the guarantor is responsible for paying the whole mortgage if the mortgage borrower cannot,” said the Money Advice Service.

Make sure whoever acts as your guarantor takes independent legal advice and talks to a mortgage broker before agreeing to anything.

If a couple are living in a house where just one partner is detailed for the mortgage, it’s this person who will be responsible for paying the mortgage.

That said, if one person isn’t listed to pay the mortgage, it may still be that they’re able to make a claim for a share of the home.

The law on this depends as to where you live in the UK, and the Money Advice Service state that it’s “essential” to take advice from a solicitor who specialises in the law relating to cohabiting couples.

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