Separation can be one of the most challenging times in your life, and figuring out what to do with your home is often at the heart of it. However, there are several options available from buying out your ex-partner to selling and starting fresh. We’ve broken these down to help you understand what’s possible and make the best choice for your situation.
Remortgaging to Buy Your Partner Out
If you want to stay in the property, you can look at remortgaging to buy out your partner’s share. This involves taking out a new mortgage in your name only and using some of the funds to pay your ex their share of the equity, if required. You’ll also need to complete a legal process called a transfer of equity to remove their name from the deeds.
Can I afford it?
The key factor is whether you can afford the mortgage on your own. Lenders will assess your income, existing debts, and overall financial commitments. If you have children or other dependents, this will also be taken into account.
What if I have bad credit?
If your credit score isn’t perfect, it doesn’t mean you have no options, but it might be harder or more expensive. Some specialist lenders consider applicants with bad credit, though rates can be a littler higher. You might also need a larger deposit or more equity in the home.
What if I can’t afford it alone?
If taking on the mortgage alone isn’t possible, there are still alternatives:
- Joint Borrower, Sole Proprietor Mortgages: A family member (often a parent) can go on the mortgage with you to boost affordability without being a legal owner of the property.
- Guarantor Mortgages: A family member guarantees the mortgage payments, which can help you borrow more.
- Sell and split the proceeds: Sometimes, the most practical option is to sell and divide the equity, allowing both parties to move on independently.
Protection — Staying Secure After Separation
It’s important to review your protection policies. If you’re taking on a mortgage alone, consider having life insurance and critical illness cover to ensure your home stays safe if the unexpected happens. Income protection is also worth discussing to protect against loss of earnings.
Early Repayment Charges (ERCs)
If you’re in a fixed-rate mortgage deal, leaving early can mean paying an Early Repayment Charge (ERC). This is usually a percentage of your remaining balance and can range from 1% to 5% depending on how long you have left on your deal. It’s crucial to factor this in when deciding whether to remortgage or sell.
You can check your latest mortgage statement or ask your lender to confirm your ERC amount.
Selling and Moving On — Is It the Best Choice?
Sometimes selling up and starting anew is the cleanest solution. This can be especially true if neither party can afford to stay or if you want a complete financial break.
Costs to consider when selling
- Estate agent fees: Typically 1%–1.8% of the sale price.
- Conveyancing (legal) fees: Around £1,000–£2,500.
- Removal costs: Vary, but average around £1,000+.
- Stamp Duty Land Tax (SDLT): If you’re buying a new home, you may need to budget for stamp duty. Transfers of property between separating spouses are usually exempt, but it’s worth checking the latest government guidance.
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Legal Considerations
In some cases, the court may put in place orders (like Mesher orders) to delay the sale of the home until a certain event happens, for example when children reach a certain age. If you’re unsure, it’s always wise to speak to a solicitor who specialises in family law.
Need Help Working Out What’s Best?
Separation is stressful enough without having to navigate complicated financial decisions alone. Our experienced mortgage advisers can help you understand your options, work out affordability, and guide you step-by-step, whether you’re looking to stay or move on.
Book a free, confidential consultation today, we’re here to help you make a fresh start with confidence.
