Can you stop paying the mortgage after a divorce?

It’s important to remember that whoever applied for the home loan, and is listed as the property owner, will be responsible for the mortgage repayments - regardless of your relationship status. If you and your partner separate, you are both still responsible for the mortgage repayments, unless you change the arrangement of the loan and buy them out of the mortgage. 

Often in a divorce, one partner may choose to live in the property until the other can buy their own place. Subsequently, the individual staying in the home will try to take over the mortgage as the soul owner.  

The most common course of action is to buy out one partners’ share in the property and free them from further mortgage repayments. This could also come with complications, as you will need to prove that you can service the home loan without the additional income brought in from the former partner. 

In the worst-case event that your ex-partner decided to stop repaying the mortgage when you chose to split, you may need to get a court order to ensure they continue making the repayments. In this instance, it may be worth seeking legal advice and speaking to your lender to let them know the situation. 

Whatever you decide, don’t forget to communicate your arrangement to your lender and ensure that the loan documents accurately reflect any changes to the circumstances. If you’re no longer living in the home but are still listed as a co-borrower, any failure to repay the mortgage could affect your credit rating.  

On the other hand, if you continue to be jointly responsible for repaying the home loan, you may want to ensure your ex can’t redraw from the mortgage or withdraw from any linked offset account without joint approval. Ideally, you should not take on more than your fair share of any joint liability.

When going through a divorce, ownership of any assets, such as property, shares, artworks, jewellery, and more, are likely to be discussed and negotiated upon. 

You should first review your personal financial situation when separating, regardless of the assets owned and liabilities incurred by you and your spouse. This will help you ensure that you don’t suffer an undue financial burden due to the separation. 

You may need to speak to a financial advisor and a lawyer to understand your rights and responsibilities. For instance, if you want to continue living in the home and take on your spouse’s share of the mortgage, you should ensure you have the income and savings to refinance and service it.

This is especially relevant for any partner that took time off work for caretaker duties, such as raising children or caring for sick relatives, that may not currently be earning an income, as this can impact your ability to service a home loan by yourself.  You could also consider selling the home and splitting the profits after paying off the home loan if you don’t have sufficient funds to continue repaying the mortgage. 

You’ll also need to consider any additional expenses related to the mortgage you or your ex incurred that you may agree to divide as well. If you decide to sell the house and discharge the mortgage, you need to discuss who handles the financial transactions involved in the process. If you and your ex cannot agree on these details on your own, you may have no choice but to go to court. However, you should remember that a divorce can increase your liabilities in terms of renting a home or paying child support, even without adding on the legal expenses.