10/08/2026
Transfer of equity:
Just a quick post on what happens when you’re in a joint mortgage and decide to separate. I have dealt with a lot of these situations recently so thought it was a subject worthy of a post.
There are a few options when you own a house jointly but decide to separate, you can sell the home and split the equity, if agreed between you, you can both remain on the mortgage but only one party remain in the home, or you can look to buy out the other party (transfer of equity) it’s the latter of the options I will concentrate on today.
A transfer of equity is essentially one applicant buying out the other applicants share of the property to take on the mortgage and home on their own. Usually this means raising equity against the home (unless you have savings or a generous family member) to pay the other party their share of the equity in the home and take on the mortgage on your own.
Before starting the process you’ll need to agree with your ex or soon to be ex partner a buy out, this in most cases is 50% of the equity (there are situations where this isn’t always the case, but if I go into all of the permutations it would be the longest post ever made on Facebook). To do this you’ll need to work out a fair valuation of the home and then subtract the mortgage balance plus any costs for the work to do this. Most people get three estate agents out to value the home and then work off the average value across the three market appraisals, most people do this because it’s free, however, in my opinion the fairer way is to pay for one professional RICS valuation (about £200) and work off that. So say the home is worth £200k you have a mortgage of £97k the early repayment penalty to your existing lender is £2k and your total fees for the transaction will be £1000. The total equity is £100k so the party leaving the mortgage will be due £50k to be bought out of the home.
Obviously it’s unrealistic to time your separation with your mortgage fixed rate ending so often the parties can find themselves tied into a joint fixed rate mortgage with early repayment penalties when this is the case the first port of call is to contact your existing lender to see if they will allow you to take on the mortgage on your own, most existing lenders will only do transfers of equity directly so you cannot use a broker for this, however it is still likely worth seeking their advice for the process and guidance. If your existing lender won’t allow this (it’s quite common) the alternative is a re-mortgage, this allows you to raise the equity required to buy out the other party and transfer the loan and title deeds into your name only.
You’ll need a solicitor to carry out the legal work required for this as well and can expect to pay around £800+ for this service. This will either be a standalone transfer of equity (when you’re able to stay with the same lender) or a re-mortgage and transfer of equity if you need to change lender.
Sorry for the long post but hopefully it’s helpful to some.
If you have any questions or would like any confidential guidance on this please feel free to drop us a DM.
