Separating from your partner can be a difficult and complicated process, whether you’re married or in a de facto partnership. This is especially true when you have joint ownership of property.

In these situations, it’s sometimes unclear who’s responsible for making mortgage repayments, especially if one partner has moved out of the home and is covering separate accommodation costs.

Unfortunately, this lack of clarity often leads to disputes and litigation. To help you avoid that and manage your split as amicably as possible, let’s take a closer look at what your options may be and who’s responsible for making mortgage repayments after separation.

Your options for paying a mortgage after separation

You have several options when it comes to paying your mortgage after separation. Here are a few of the most common:

• Keeping the home and negotiating repayments after one party moves out.
• Selling the home and splitting the proceeds to cover future accommodation costs.
• The partner who stays buying the other partner out and taking responsibility for the mortgage.
• Both parties move out and rent the house.
• Filing an application with family court to resolve disputes.

It may take some time to reach an agreement on the best way forward. While you are reaching a resolution, you may be able to request a 3-6 month repayment deferral from your bank to make life easier.

Negotiating mortgage repayment after settlement

In most separations, one person will leave the home. In some cases, this person will believe that they are not responsible for making mortgage repayments as they are not living in the property. In other cases, they may not be able to afford to pay both the mortgage and their own accommodation costs.

The lender or bank will hold both partners responsible for repayment of the loan if they are co-borrowers. Regardless of where each partner is living, that obligation remains. This means that the partner who has left the property still has a responsibility to make mortgage repayments. And unfortunately if either partner stops paying the mortgage, both parties’ credit scores could be negatively impacted, making it harder to borrow in the future.

While this situation can be difficult, it’s always best to try and find a resolution through mediation and compromise. Both partners should discuss what they can reasonably afford to contribute with all other factors such as childcare, income and other accommodation expenses in mind.

If a resolution can’t be arranged, family lawyers can help to mediate and go to court if necessary.

Going to Family Court to resolve a mortgage repayment dispute

If the circumstances are right, the Family Court can order a home to be sold, or for one partner to make mortgage repayments. When assessing each case, they’ll look at each partner’s living situation, the living situations of any children, the income and expenses of each partner, and make a judgment based on what is fair under the law and can be reasonably expected.

If you and your partner have separated and cannot reach an agreement on making mortgage repayment, it’s always best to seek help right away. The team at Testart Family Lawyers are expert mediators and can help you reach an agreement outside of court to save you money and time.

If you are unable to reach an agreement, we can help you file an application to the family court and guide you through the entire process. Get in touch with Testart Family Law today to find out how we can help you.