Splitting up with partner? Who must pay the mortgage?

16/10/2018
Couples who no longer want to live together must agree on who is paying the mortgage after separation. This can often be a challenge as emotions boil over during what can be a difficult time. What is worse is when one of the joint owners stops paying the mortgage and claims they don't have to pay as they no longer live at the property. We explain what you can do if your partner is not paying half of the mortgage below, however you may want to also read our other article, Can I force the sale of a jointly owned property?

What does the mortgage lender state in their mortgage terms?

Source: Barclays Residential Mortgage Conditions 2018 edition
If there is more than one borrower:
  • The Mortgage Documents apply to all of you together and each of you on your own;
  • Each of you will be fully responsible for meeting the obligations under the mortgage documents; and
  • We will be entitled to accept the signature, instruction or authority of any of you (borrowers on the mortgage deed) as being given for and on behalf of all of you, unless you have told us otherwise. This may mean that we agree to change the type of interest rate you have on the application from one of you. We will, however, always require all of you to apply where the application is for us to make a further advance.
The wording for different mortgage lenders may differ slightly but the context is clear that regardless of your relationship, beneficial interest or if you live in the property, you are both liable to pay the mortgage.

Keeping up repayments of your mortgage is very important so read on to find out:


Do you need help to force the sale of a jointly owned property?

Our solicitors specialise in helping joint owners who are separating to sell their home and offer the following services:
  • Deed of Trusts for setting out your intentions in a property with a joint owner
  • Mediation with joint owners
  • Applications for a court order for sale
* No time for forms? Call us now on 0333 344 3234 (local call charges apply)

Fixed Fee, No Sale No Fee with a 5 out of 5 rating

 

What happens if you stop paying the mortgage?

If you stop paying your mortgage repayments in full then your home could be repossessed by your mortgage lender. The other implications are that your credit score could be negatively affected that will have an impact on any future mortgage application, mobile phone contract or loan approval. Click to read more here about what happens when you get repossessed.

Do you have to pay the mortgage if I move out?

It is common for one person to move out if the relationship breaks down. If this is the case then the person who moves out is still liable to make full repayment of the mortgage repayments.

How do you share mortgage repayments after you break up?

How you split the monthly mortgage repayments is of no concern to your mortgage lender because from their perspective both of you jointly must pay the full mortgage amount, however between a couple you may agree to share the mortgage repayments in any share you like. All too often one person leaves and expects the other person to pay for the mortgage and other household costs, however if they can't afford to or stop the property could be repossessed and your credit rating could be negatively affected.

These are some ideas on how to share mortgage repayments when you split with your partner:
  • Stay living in the same property and continue to share the mortgage repayments 50/50 (or however agreed at the outset)
  • One party leaves the property, a tenant moves in and pays rent for their room (subject to mortgage lender consent) and continue to share the mortgage repayments 50/50 (or however agreed at the outset)
  • Agree for the party remaining in the property to pay the mortgage repayments in full whilst the leaving party pays rent/mortgage on a new property

What if I've been paying half the mortgage and I'm not on the mortgage?

If you are splitting with a partner and have been paying the mortgage, but aren't registered as an owner then you should read this - Splitting up with partner? Are you owed money from the sale of your house?

What is most important when you split from partner with a mortgage is that the full mortgage repayments are made each month; even if you agree how to split the mortgage. Don't be caught out paying your share and your partner not paying theirs. To protect against this you should have at least one month's mortgage repayment saved in the account to cover in the event or either of you not paying your share of the mortgage.

Joint Mortgage Separation No Marriage

What happens if one person has been paying more of the mortgage repayments?

Where one party pays more than the other towards the mortgage repayments, they may have a case for receiving more of the property income on sale as they have created a constructive trust. Click to read more about constructive trusts.

If you have been paying more of the mortgage repayments then call us to ensure you receive the correct share of any gain from the property when you sell - call 0333 344 3234.

This is a technical area so it is best to look at an example:

Jane and Jim purchased a property for £100,000 as tenants in common. Jane invested £20,000 and Jim invested £30,000 so Jane owns 40% and Jim owns 60% at the outset. The mortgage repayments were £100 per month, however Jane paid £90 of this and Jim paid £10.

After 5 years Jane and Jim break up and decide to sell for £110,000 (an increase of £10,000) and the original mortgage of £50,000 has reduced to £44,000 (£6,000 reduction).

In this example, Jim gets 60% of the £10,000 increase in property value (£6,000), 10% of the £6,000 mortgage repaid (£600) and his original deposit of £30,000; so £36,600 in total. Jane on the other hand gets 40% of the £10,000 increase in property value(£4,000), 90% of the £6,000 mortgage repaid (£5,400) and her original deposit of £20,000; so £29,400 in total.

An issue can arise if Jim argues that he is due 60% of everything regardless of how the mortgage was split and without a written agreement, Jane will face a challenge having to employ solicitors and even potentially going to court.

The way Jane and Jim could have saved time and money going to court would be to have drafted an agreement at the outset that covered their arrangement showing Jane's greater contribution towards the mortgage repayments.

Is selling the property the only option if you break up?

If your split is final, you have to think in terms of ultimately jointly selling your property or one of you buying the other one out with one of you remaining in the property. read our other article, Can I force the sale of a jointly owned property?

Here are some of the options available to you:
    1

    Keep the property and agree terms

Selling the property may not suit you both, so you could agree how to jointly own the property until you decide to sell. You will need to agree:
  • Who is to live in the property?
  • How long do you agree to keep the property until it must be sold?
  • What percentage share of the property do you each own?
  • How much should each party pay towards the mortgage repayments and household outgoings?
The above should be formally noted in writing within a deed of trust and a restriction applied to the legal title. If the property is currently held as joint tenants, you'll need to change the ownership to tenants in common. You can do this yourself or you can use a solicitor to do this for you.

    2

    Buy your ex's share in the property

You can agree to buy your ex's share of the property and to keep the property. You can only do this if you obtain the mortgage lender's consent to be the sole name left on the mortgage. The mortgage lender will complete an affordability check to confirm if you can afford the mortgage on your own.

Once you obtain mortgage lender consent you need to agree with your ex the amount of money they expect to be paid to buy their beneficial interest in the property (the amount to remove their name from the property). In some cases this may be just their original deposit, however you should discuss this with them.

With mortgage lender consent and an agreed amount to buy the share of the party leaving the property, you can start the legal process which is called a Transfer of Equity process.

Call 0207 112 5388 to speak to our advisers about getting a Transfer of Equity or click for an online quote

If necessary, the person remaining on the title may have to remortgage the property to secure the funds to pay the appropriate consideration to the person moving out. Once again, the lender's consent is all-important.

Do you need help to force the sale of a jointly owned property?

Our solicitors specialise in helping joint owners who are separating to sell their home and offer the following services:
  • Deed of Trusts for setting out your intentions in a property with a joint owner
  • Mediation with joint owners
  • Applications for a court order for sale
* No time for forms? Call us now on 0333 344 3234 (local call charges apply)

Related News Articles

 
Can I force the sale of a jointly owned property?
05/10/2018
Splitting up with partner? Are you due money from the property?
16/10/2018
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