Mortgage after separation: buying out your partner
After a separation, both of you stay liable for the joint mortgage until the lender releases one borrower or the loan is refinanced, even if one of you moves out or makes the repayments alone. Keeping the home means refinancing into your sole name and paying your former partner their share of the equity: in Lendology's example, an $850,000 home with a $450,000 loan and a $200,000 payout needs a new $650,000 loan. That loan is approved on your income alone, so a buy-out suits the partner who can service it, and a formal settlement usually removes stamp duty on the transfer.
- Both borrowers stay liable until the lender releases one or the joint loan is refinanced; moving out or paying alone changes nothing (Home Loan Experts)
- Buy-out: value the home, subtract the loan and selling costs, apply your ex’s share; $850,000 home, $450,000 loan, $200,000 payout, $650,000 new loan (Lendology’s example)
- The new loan is approved on your income alone under the APRA 3% buffer (Mozo); a settlement order does not oblige a bank to lend (Home Loan Experts)
- Consent orders or a binding financial agreement trigger a stamp duty exemption on the transfer in most states (Mozo)
- Claim within 12 months of a divorce order or 2 years of a de facto separation (Westpac, Mozo); the Family Law Amendment Act 2024 applies from 10 June 2025
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are calculated on a secured loan of $150,000 over 25 years for home loans, a loan of $30,000 over 5 years for car and personal loans, and $50,000 over 5 years for equipment finance, unless the lender states another basis.
What happens to the mortgage when you separate?
Nothing, until you make it happen. Home Loan Experts publishes the rule that catches people out: until the lender formally releases a borrower or refinances the joint loan, both borrowers generally remain responsible for the mortgage, and moving out, making the repayments on your own, or privately agreeing that one person will keep the home does not change that. Mozo publishes the three ways it ends: sell the property and split the proceeds, one partner buys the other out by refinancing into their sole name, or keep co-owning the property as an investment. This guide is about the second.
How is the buy-out calculated?
| Step | Lendology's published example |
|---|---|
| Property value, by independent valuation (agree a valuer, or engage two and average) | $850,000 |
| Less the mortgage balance and the selling costs that would apply if sold | $450,000 mortgage; net equity $400,000 |
| Former partner's share of net equity (usually 50% unless a different split is documented) | $200,000 |
| New loan required in your sole name: existing mortgage plus the payout | $650,000 |
Home Loan Experts publishes the fuller formula: existing mortgage balance, plus the former partner's payout, plus eligible legal, conveyancing and refinancing costs, transfer duty if no exemption applies, LMI if the LVR needs it, other debts or adjustments in the settlement, and any equity loan that must be refinanced, less your cash contribution. It also publishes the caution that Australian settlements are not automatically a 50:50 split of one property: the broader property pool, debts, each party's contributions and their current and future circumstances are all relevant, and your lawyer sets the figure, not the lender.
Can you afford the loan on your own?
This is the question that decides it. Lendology publishes that lenders assess a sole-name separation refinance the same way as any other loan, and the challenge is that your income may now be lower than when the joint loan was approved. Mozo publishes that the solo refinance has to pass the APRA 3% serviceability buffer. Westpac publishes what it wants to see: a job or stable income that supports you, your family and the repayments, payslips or proof of income, and a financial buffer for rate rises. Child support and family payments count at some lenders and not others, which is where a broker changes the answer. Run the borrowing power calculator on the $650,000-style figure before the lawyers start drafting; if it does not service, the options are a bigger cash contribution from the settlement, a family guarantor to bring the LVR down, a longer term, or selling.
Stamp duty, time limits and the legal side
Mozo publishes two things worth tens of thousands. First, formalising the settlement through consent orders or a binding financial agreement triggers a stamp duty exemption on the property transfer in most states; an informal agreement does not, and Home Loan Experts lists transfer duty as a cost only where no exemption applies. Second, the time limits: a claim must be made within 12 months of a divorce order for married couples or within 2 years of separation for de facto couples, which Westpac publishes too, with the advice to make prompt inroads. Mozo notes the Family Law Amendment Act 2024 codified a four-step settlement process from 10 June 2025. Westpac's sequencing is the right one: the lender confirms your approved limit first, then you put the settlement offer to your former partner with your lawyer, so you are not negotiating a figure you cannot fund.
What do lenders and specialists publish?
Checked against each source's published page on 20 September 2026. Policies change without notice, so confirm before relying on them.
| Source | Process as published | Assessment | Costs and duty | Other published points |
|---|---|---|---|---|
| Westpac | Home Finance Manager confirms the approved limit; then the settlement offer, with your family lawyer | Stable income for you, dependants and repayments; payslips; a buffer for rate rises | Not published | Claim within 12 months of a divorce order or 2 years of de facto separation |
| Home Loan Experts (broker) | Settlement, sole-name approval, then refinance, payout and transfer completed together | Qualify without your former partner's income | Legal, conveyancing, refinancing; transfer duty if no exemption; LMI if applicable | Both stay liable until release or refinance; a settlement does not oblige a lender; not automatically 50:50 |
| Lendology (broker) | Independent valuation, net equity, ex's share, new loan | Assessed like any loan; income now lower | Selling costs deducted in the equity calculation | $850,000 / $450,000 / $200,000 / $650,000 example |
| Mozo | Sell, buy out, or co-own as an investment | Solo refinance must pass the APRA 3% buffer | Stamp duty exemption on transfers under consent orders or a BFA in most states; discharge fee and break cost on a fixed rate if selling | Family Law Amendment Act 2024 from 10 June 2025; joint tenancy vs tenants in common |
Fixed rates, joint tenancy and the other traps
If the joint loan is on a fixed rate, refinancing it to a new loan can trigger a break cost; ask the existing lender for a variation to sole name inside the fixed term first, and read the break costs guide before assuming the answer. Mozo explains the ownership point: under a joint tenancy each owner's share passes automatically to the survivor, under tenants in common the shares can be unequal and pass by will, and the settlement transfer changes the title as well as the loan. Keep every repayment current through the process, because a missed payment lands on both credit files. And if keeping the home does not add up, selling and buying again is not a failure: a single parent can buy with a 2% deposit under the 5% Deposit Scheme. A broker prices the buy-out refinance, the guarantor option and the sell-and-rebuy path together; get matched with a licensed broker who works this kind of lending, and take legal advice on the settlement separately.
After a separation
The refinance, the costs and the fallback.
Separation and home loan FAQs
Can I get a mortgage to buy my partner out?
Who pays the mortgage after separation in Australia?
How is the buy-out amount calculated?
Do I pay stamp duty to transfer the home into my name?
What are the time limits?
Can I keep the loan and just remove my ex from it?
What if I cannot service the loan alone?
What documents will the lender want?
Know the number before the settlement offer
Tell us the home's value, the loan balance and your income, and we refer you to one licensed broker partner who confirms what you can borrow alone and structures the buy-out refinance around the settlement. Free for borrowers, no obligation.