With interest rates and the cost-of-living crisis in the headlines on a daily basis, mortgage affordability is a key concern for many homeowners, not least for couples who are separating and wondering how this will affect their mortgage arrangements.

Most couples will have a mortgage on their family home.  The mortgage may be in joint names, or in one person’s sole name. Either way, the house will be considered an asset, and it will need to be dealt with as part of the financial settlement.

Whether a mortgage is affected by divorce or the dissolution of a civil partnership, and the extent to which it is affected, will depend on the terms of the settlement or court order.  

‘Most couples prefer to negotiate a clean financial break, but if you have a joint mortgage then you and your partner will be both jointly and severally liable for that mortgage until it is repaid or transferred into one person’s name,’ says Stephen Carr, Family Lawyer with Ware & Kay in York.

There are ways in which a matrimonial home will be dealt with when a marriage or civil partnership ends, each with respective arrangements for the mortgage.  Some couples may need to take additional steps if their home is in a position of negative equity.

The common routes are:

·       Selling the former matrimonial home - If you decide to sell your home as part of your divorce, then an estate agent will be appointed by you both to achieve the best price. 

·       If you keep the house – You will jointly get the property valued by a qualified professional.  If the mortgage is in joint names, then you will need to repay the mortgage and take out a new mortgage in your sole name, or, you will have to seek the agreement of your mortgage company to release your partner from the mortgage and transfer it into your name. 

·       If your spouse or civil partner keeps the house - If the house is in your name, then you must arrange to redeem your mortgage at or before it is transferred to your former partner.  If the mortgage is in joint names, even if you do not reside in the house, you will still be jointly and severally liable for it. 

We can advise and help you on the options available to you in order to get to best meet your future needs.  Please call Stephen Carr on York 01904 716000 or email stephen.carr@warekay.co.uk