Going through a divorce or separation can be incredibly stressful. On top of the emotional and logistical challenges, you may also be wondering: where am I going to live? If you and your spouse purchased a home together, you might wish to continue living there—particularly if you have children. But what does this mean for your mortgage obligations? Below, we explore what happens to a joint mortgage and what you can do if you need to take out a new mortgage after divorce.

What Happens to a Joint Mortgage When You Divorce?

From your mortgage provider’s perspective, your divorce changes nothing: you both signed a joint mortgage contract, so you both remain liable for the repayments unless and until that arrangement is altered. That means:

• You Could Continue Paying Together: Perhaps one spouse lives in the property while both pay the mortgage, or you both move out but carry on making payments.
• You May Seek a Transfer of Equity: If one spouse intends to remain in the home, they might opt to buy out the other spouse’s share, subject to the lender’s approval.

It’s essential to remember that simply moving out of a jointly owned property does not remove your name from the mortgage agreement. Each spouse remains responsible for the loan unless the lender formally changes it.

Could Your Mortgage Interest Rate Change After Divorce?

In some cases, yes. Divorcing can alter your financial situation, which in turn can affect your mortgage options. For example:

• Remortgaging Alone: If you wish to become the sole owner of your current property (by removing your ex-spouse’s name from the mortgage), the lender will look at your income, credit history, and outgoings. This might lead to a different interest rate than before—possibly higher if you have only one income supporting the mortgage.
• Taking Out a New Mortgage: If you plan on purchasing a new property, your credit score or monthly budget may have changed post-divorce. A high street lender could offer a favourable deal if your finances are in good shape; otherwise, you might need a specialist lender at a higher rate for a year or two until your credit improves.

Many lenders only consider certain credit issues for a set period—say, 24 or 48 months. If you maintain a positive payment record over this timeframe, you might later remortgage at a more attractive rate.

Should You Hire a Broker for a Second Mortgage After Divorce?

It can be worthwhile to consult a mortgage broker if you need a new mortgage or want to transfer an existing one into your sole name. Brokers have insights into:

• Which Lenders might consider your changed financial circumstances
• How to Present Your Application to increase the likelihood of approval
• Potential Specialist Offers if you need a higher-rate deal initially

While it is possible to handle everything on your own, doing so can be time-consuming. A broker may only need a few hours of your time to gather your information, research lenders, and organise the application. The cost of brokerage needs to be balanced against the efficiency and reduced stress of a faster, more straightforward process.

Key Takeaways

1. Both Spouses Remain Liable: A divorce does not automatically remove you from a joint mortgage.
2. Remortgaging: If one spouse hopes to keep the family home, a transfer of equity and remortgage may be needed.
3. Interest Rates: Post-divorce, you might end up with different rates if you apply for a new loan or remortgage in your sole name—especially if your financial profile has changed.
4. Professional Advice: Mortgage brokers can simplify the process, but you can handle it independently if you have the time and confidence.

If you’re unsure about how best to proceed, seeking professional advice can help you avoid costly missteps and find a solution that ensures secure housing for you (and any children) following a divorce.

Need More Guidance?

For further advice on financial settlements, mortgages, and other legal matters surrounding divorce, HM & Co. Solicitors is here to guide you. Our experienced family law team can help you explore your options, protect your interests, and move forward with greater confidence.

HM & Co. Solicitors
186 Lower Road
Surrey Quays
London SE16 2UN

Telephone: 02071128180
Email: info@hmsolicitorsltd.com