Buying Out a Partner in a Mortgage
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Sarah Tucker: Hello and a very warm welcome to today’s episode of The Mortgage Mum podcast. You’ve got a treat here because we have two co-hosts today – Liz, who is a member of the Mortgage Mum team – and Tessa, who’s going to be asking all your questions.
A big thank you to Jacqueline who messaged The Mortgage Mum and asked questions around the topic we’re covering today: remortgaging when you are buying somebody out of your property.
Jacqueline said she’s been looking for a podcast about remortgaging and buying a partner out of a mortgage. This is usually post breakup or post divorce and many people ask us about this question.
We’re going to be answering Jacqueline’s specific questions within this episode. Thank you for sending them in and prompting us to have this discussion today.
What happens if you split up with someone you have a mortgage with?
Sarah: Post-breakup, people tend to go to the money side of things quite quickly. They’re navigating the emotional impact, particularly if they have children, but one of the first phone calls they tend to make is about the mortgage.
As advisors, we’re aware that the client is making a big decision at an extremely vulnerable time of their life, potentially. Most people, once they decide to part ways, want to sort out all the finances, separate the mortgage and feel that sense of independence.
There are different options when splitting up with someone you have a mortgage with, and it largely depends on affordability. Very commonly one partner will want to keep the property, buy the other person out of the mortgage, and that person moves out.
The other option is you both decide to sell the property, split the equity you’ve gained and both find somewhere else to live. In the first stage of the process, though, you continue jointly owning the property and decide how to manage the mortgage payments while you both remain on it.
We’ll talk today about all those different options in more detail. But essentially, it’s best to seek advice to decide which route you’re going to go down.
How do I get a mortgage to buy out a partner? Can I remortgage to buy my partner out?
Liz: You can remortgage to buy a partner out. Speak to a broker to get the correct advice, because it will come down to affordability.
If you’re buying a partner out, your monthly payments are likely to increase, so it’s about whether you can afford those monthly payments. An advisor will look at the criteria of different lenders to see which would be the best for your circumstances.
How long does it take to buy a partner out of the house? Is it a lengthy process?
It can be. You’ve got to get all your ducks in a row first, and it depends how long that takes. Generally, it is a remortgage and a transfer of equity. There’s a little bit more legal work involved, but a typical remortgage can take from four to 12 weeks.
That depends on your mortgage lender, the efficiency of your advisor, and your efficiency in getting documents together and all the negotiations around that.
To tell you a bit about what you need to get done, firstly, you’ve got to get advice and decide between you what’s going to happen with your property. Are you going to move out? Are they? Are you happy to change ownership?
Then your advisor will check whether the affordability works for you. If so, you can start the process. You get all your documents together – listen to one of our remortgage episodes to find out what you’ll need.
You’ll need a valuation of the property to see how much it’s worth today, how much equity there is and how much you might owe your ex-partner. From there, it’s a normal remortgage application with an additional transfer of equity on the legal side.
Can I use equity release to buy out my partner?
Sarah: Just to clarify, some people call it equity release when we’re releasing equity from the property to buy the partner out. Other people understand equity release to mean over 55s lending, which is a completely different type. I’m going to cover both.
You will probably release equity to buy your partner out, because not many people have hundreds of thousands sitting in the bank. Let’s say you both live in a property worth £500,000 with a mortgage of £200,000. That leaves £300,000 of equity.
You’d split that however you’ve decided to. To keep it simple, let’s imagine you’re dividing it in half, so to buy your partner out, you owe them £150,000. Your mortgage is going to go up to £350,000, and it’s going to be all in your name.
If you have cash and savings and other ways of paying back that £150,000, fine, but most people tend to release it from the property.
The other type of equity release might apply if you’re over 55. If you are struggling with affordability and you really don’t want to lose the property you live in, you can look at an equity release mortgage, which is assessed differently. You’ll usually have that for life, unless you sell the property or move into care later on.
It’s a completely different type of transaction and requires a qualified advisor that’s registered with the Equity Release Council to guide you through. I would always say a mortgage should be your first choice. Equity release is something to look at if you haven’t got any other options available.
Do I need a solicitor to buy out my partner?
Liz: The simple answer is yes, you will. When you do a remortgage to change from one lender to another, you need a solicitor to sort out all the Land Registry paperwork. When you’re buying out a partner, the solicitor will also manage the transfer of equity paperwork and the settlement of funds.
In Sarah’s example where £150,000 was being raised, the solicitor would manage the
transfer of that money to the ex-partner.
Can you remove a partner from a joint mortgage? How do I change my joint mortgage to a single person?
This is one of the biggest questions we get – where do you start? As Liz just said, the transfer of equity is how you get somebody off the mortgage – but you have to be able to afford it without them. Affordability is the key factor – can you afford the mortgage on your own?
You change it by doing a remortgage. In the process, you remove that person from the equity on the property. We help lots of people do this. It’s just a case of affordability – that’s the key driver of what happens next.
What do I do if I can’t afford to buy out my partner? How much does it cost to take someone off a mortgage in the UK?
Liz: if you can’t afford to buy out your partner, you could look at different options. You could potentially increase the term of your mortgage to make it more affordable, or look at a Joint Borrower Sole Proprietor mortgage.
Sarah: With Joint Borrower Sole Proprietor, a family member can come on the mortgage with you to increase the affordability. The mortgage is held in both names, but the property and the mortgage deeds are just in yours – not the additional borrower’s.
It’s normally a short term option, with the hope that when you remortgage in a few years’ time, you can get the property back on a mortgage just for yourself. It’s really common – nine times out of 10, people need someone to come on the mortgage with them to get their ex-partner off.
Liz: Yes, and somebody in the Mortgage Mum recently did one where both partners have Joint Borrower Sole Proprietor mortgages, helping each other out. It must be a very amicable separation. It’s made the affordability work for both of them. They both own their own houses, and the exes are not named on the deeds.
Sarah: That’s really nice. A lot of breakups don’t end up like this, unfortunately, especially when you start talking about money, but that’s lovely. I like to hear stories like that.
A lot of times it’s parents that come on the mortgage, but unfortunately, because your parents are older the term of the mortgage can’t always be as long. It depends on when your parents plan to retire.
Liz: Then again, some lenders allow a split term on a Joint Borrower Sole Proprietor, so you could go off your age and have the mortgage for 30 years, and just a 10 year part for the parents. You’d have two loan terms at different amounts, which would help affordability.
I’ve been looking into it recently for a client where the dad was 69 and just taking him up to age 75 meant the mortgage payments would be massive. But I could get a split term. The son could have a mortgage for 40 years and then we did an additional amount for nine years with the dad on it.
Also, I know it might not be something people want to do, but there’s the option to sell the property. I’ve recently gone through a separation myself, and I had to sell my home because it wasn’t feasible for me to keep the large family home with the monthly payments.
We actually waited until our fixed rate was up so we didn’t have to pay a lot of early repayment charges. It was all amicable and we arranged the sale of the property when our fixed rate ended.
How was that for you? What came up for you and how do you feel now it’s all done?
Liz: I’m out the other side now and it’s definitely easier. We had only been in that home for around four years. I’d not had my children there – and a lot of people have emotional attachments to homes and selling can be a real struggle, but I didn’t have that attachment to the house. I wanted a clean break, so I was more than happy to sell. I just wanted to wait until we didn’t have a lot of early repayment fees.
How important is it to seek advice?
Sarah: If you can’t afford to buy out your partner, work with someone like Liz on a long term plan. You might not be able to have it all perfectly, but it’s so helpful to have a safe person to talk to who will explain all your options.
You don’t have to make a decision straight away. Sometimes we resist things and when we sit with it, we realise it’s actually the best thing to do – rather than putting yourself under enormous pressure at a time where you’re not feeling 100%.
You’re building a new life and dealing with a loss – it’s something you have to work through, especially if there are children involved.
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How much will I get if my partner buys me out? How do I calculate buying someone out of a house?
Liz: It’s complicated. It’s not always a 50-50 split. If there are children involved and they will be with one person more than the other, that might increase the equity split in one direction.
I personally had a solicitor involved as we didn’t want any falling out. The solicitor took that pressure away and advised what I was entitled to – that was the best thing for me.
Sarah: As Liz said, it’s not always straightforward. I have friends that did a 70-30 split or 65-35 to match with the childcare.
Whatever the share, I would suggest you write down your property value – you can use online tools to get an idea like Zoopla, or give your estate agent a call for a valuation. Then, write down how much is left on your mortgage. If you don’t know, call your lender or get a credit report – that will tell you how much is left on your mortgage. Take that away from the value and that gives you the amount of equity sitting in your house.
In a 50-50 case, you divide that in half – that’s each of your shares in that property. You can either pay that amount to your partner or offset it. Perhaps you’ve got other things you’re splitting – you could reduce the total by giving them a car you jointly own, for example. The cash value can contribute towards what you owe them.
Do I pay stamp duty if I buy out my partner?
Sarah: Despite what people may think, no stamp duty is payable on that transfer of equity.
Obviously, there is stamp duty if you purchase a new property.
But in buying out your partner, there shouldn’t be stamp duty to pay. But I will say I’m not a tax advisor, so you can double check that.
What are the disadvantages of buying someone out of a house?
Sarah: Affordability is the biggest thing. Liz really brought it to life earlier when she said it just wasn’t feasible for her to stay in her home. If you’re buying someone out, you’re taking over all of the mortgage – and it will potentially be higher if you’re using equity to pay them back.
You’ve got to be comfortable with that. It’s a big financial pressure. Obviously, our job is to make sure you can afford it – and you’re never going to be approved for a mortgage you can’t afford on paper, but we can’t measure the emotional impact of it.
Only you will know if that’s the right thing for you. It’s a bigger burden on you financially. So just make sure your income and your job feels stable enough to take that on.
There are also legal costs when buying someone out of a house, but there are always legal costs with buying and selling property. That’s a disadvantage, but it’s always the case and not specific to this situation.
One thing that’s not financially related is that keeping your home won’t give you a fresh start. A lot of people, especially women, don’t want to leave that family home. Like Liz said, there’s an emotional tie. But other people really want to get out of there and start afresh.
Some people want to start again and do things differently, rather than feel the absence of a person in a property that was once theirs together. But it’s not that simple when kids are involved. For example, my kids are really emotionally attached to our house. If they even hear me talk about Rightmove, they’re on me – “We can’t move – I love my bedroom.”
But with big change happening, as the parent you will know what’s best – and hopefully you can both align on that. It’s sometimes not straightforward to jump to another property when schools are involved.
It’s a really personal choice. That’s why you need counsel – friends and family are great but you also need people that aren’t attached emotionally to you and your kids. They can actually give you the right advice.
How can a mortgage broker help here? Is there anything else you’d like to add?
Liz: A lot of people contact me because they just don’t know where to start. If the separation has just happened, they might still be living in that home together.
A key question is around what income goes towards affordability on a mortgage. You can use different income – maintenance, benefits or universal credit. Even if the ex-partner is still living in the house, if the finances are already separated you could claim universal credit if you’re below the income threshold.
Maintenance payments could start to be paid, depending on how you’re splitting your finances. Speak to a broker with experience of this situation – we can hold your hand and advise on what’s best. We know the lenders and what criteria and income they can factor in.
Sarah: Before we go, I wanted to have another look at Jacqueline’s message, which was:
I’ve been looking high and low for a podcast about remortgaging when buying someone out. For context, my ex-husband and I separated five years ago and finalised our divorce a year ago.
We have two kids and have remained good friends. We bought the house together seven years ago. He moved out and I have stayed in the house with the kids.
We remortgaged in December 2022 because neither of us can afford on paper to take out the mortgage individually. But my goal is to buy him out when the mortgage is up for renewal in 2027 – I want to start preparing for that.
I’m planning to save up for legal fees and make overpayments for the next two years. I want to be as prepared as possible and I will do much of the process by myself.
I’d love to learn as much as I can about the process. What happens? What does the lender look for? Pros and cons, additional costs, what happens from day one, what to expect? Just everything, really.
Sarah: I think we have covered everything in this episode. But it’s worth reminding you that you need to start applying for the mortgage six months before it’s due to end.
Liz: That’s correct – six months before. How good is it that she’s already planning for 2027?
Sarah: I can feel the empowerment just in the way she’s talking. It’s like, I’m going to do this. This is my goal. I want to get ready and get all the information together. That’s the best thing you can do.
Also, we do often speak to clients a couple of years before something like this. You’re a client for a lifetime when you’re working with us. You might just want to use us as a sounding board on a 20-minute consultation call.
That might be all you need to get yourself ready, and makes it easier when contacting someone for your remortgage at the time. So don’t be afraid to reach out if you do want some advice. That goes for everybody, not just Jacqueline.
Thank you so much for sending that in. And if any of you want your questions answered, just send them in to us. We’d love to hear from you.
This is such an emotionally driven thing. Liz, you probably know better than I do with your clients and your own personal experience, but there’s so much emotional baggage, isn’t there? There’s a lot of shame and vulnerability.
Liz: Yes. I didn’t tell people for months that I was separated. I couldn’t. We’d been together so long and I felt the shame of it not working out. It is difficult.
Sarah: And mum guilt follows us around. Especially in a breakup, a mum will hold the children through it. That’s nothing against dads – I’m sure lots of dads have had to do the same. But often women are feeling the weight of it all as well as trying to navigate decisions.
It’s so important that women are equipped with financial knowledge. So many women we deal with haven’t touched this stuff before. They’re feeling vulnerable, like they don’t know what they’re doing. They don’t feel clever enough to navigate it.
I love nothing more than seeing a woman realise that she is clever and capable enough, and can actually grab hold of her finances now.
Even if you’ve listened to this episode and it doesn’t specifically relate to you, please get equipped financially and get that knowledge behind you. Start investing, get advisors, get your team together. So many people just say, oh, my husband deals with that – and when this situation happens, they feel even more powerless.
We live in a time where that doesn’t have to be your reality. And it’s really empowering to take control.
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