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I’m separating from my wife but we’re both still named on the mortgage. I’ve moved out, but I’m worried about credit risk, affordability and whether the house has to be sold. What are my options?
Alistair Myles, partner at Ribet Myles Family Law, says moving out of the family home does not mean stepping away from the mortgage. One of the most common and costly misconceptions of separation is that physical departure changes financial responsibility. It does not. If your name is on the mortgage, you remain fully liable until the loan is repaid or the lender formally releases you, regardless of who lives in the property.
Where a mortgage is held jointly, liability is “joint and several”. In practical terms, the lender can pursue either borrower for the full monthly payment. Informal agreements between separating spouses are irrelevant to the bank. If payments are missed, both credit records will be affected, potentially limiting future borrowing, remortgaging or even the ability to secure rental accommodation. Protecting your credit position should therefore be the immediate priority.
If affordability becomes an issue, it is sensible to engage with the lender early rather than wait for arrears to arise. Some mortgage providers may offer short-term solutions, such as a payment holiday or a temporary switch to interest-only payments, particularly where a sale is being planned. These measures can help manage cash flow during a transitional period, but they do not remove liability and should be approached with caution.
Once one party has moved out, an early decision needs to be made about the future of the property. Broadly, there are two realistic options: sell the home, or one spouse buys out the other and assumes responsibility for the mortgage. A buyout requires agreement on the value of the property and, crucially, the remaining spouse must satisfy the lender’s affordability criteria to take over the mortgage on a sole basis. Even if a family court later orders that one spouse should retain the home, the lender cannot be compelled to release the other borrower.
Our next question
I’m an entrepreneur and for many years my succession plan was to pass on the business to my children when I die and they would use business property relief to inherit it free from inheritance tax. The government threw that plan into disarray in 2024 when it capped BPR claims at £1mn. However, in December it said it would raise the BPR allowance to £2.5mn from April 6. I am now looking to divide my shareholding into multiple ownership to take advantage. What are the risks associated with having multiple shareholders?
Selling is often the cleanest outcome, but it is not always immediate. Although the court has wide powers to order a sale as part of a final financial settlement, it is very difficult to obtain an interim order for sale during divorce proceedings. In practice, this means separated couples may have to manage a joint mortgage for longer than expected.
Where children are involved, the court’s focus shifts to housing stability and meeting their needs. This can result in a deferred sale or temporary arrangements, allowing one parent to remain in the home, even where this creates financial pressure elsewhere.
Act early. You should confirm whose names are on the deeds and mortgage, ensure payments continue, explore short-term options with the lender and seek legal advice before informal arrangements harden into long-term risk. Delay is often what causes the greatest financial damage.
The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.
Do you have a financial dilemma that you’d like FT Money’s team of professional experts to look into? Email your problem in confidence to money@ft.com.