What is a partner buyout?
A partner buyout (also called an equity buyout) is when one person takes over full ownership of a jointly owned property after separation. You refinance the existing joint mortgage into your sole name and pay your ex-partner their share of the equity.
Example
Property value: $800,000. Mortgage owing: $400,000. Total equity: $400,000. Your ex's share (assuming 50/50): $200,000.
You need to refinance the $400,000 mortgage PLUS borrow an additional $200,000 to pay your ex. Total new loan: $600,000 on a single income.
Can you afford the buyout?
The key question is whether you can service the total new loan amount on your income alone. Lenders will assess:
- Your gross income (employment, self-employment, contract)
- Child support received (many lenders accept 80-100%)
- Family Tax Benefit and Centrelink payments
- Child support paid (deducted as an expense)
- All other debts and living expenses
Step-by-step process
- Get a property valuation - establish the current market value
- Agree on the equity split - this is part of your property settlement (not always 50/50)
- Check your borrowing capacity - we assess whether you can service the total loan on your income
- Get Consent Orders or a BFA - formalise the agreement (also needed for stamp duty exemption)
- Apply for refinance - we submit to the most suitable lender
- Settlement - the old loan is paid out, your ex is removed from the title, and you have a new loan in your sole name
What if you cannot afford the full buyout?
If the numbers do not work on a single income, you have options:
- Extend the loan term - reducing monthly repayments (e.g., from 25 to 30 years)
- Negotiate a lower buyout - your ex may accept less equity in exchange for other assets
- Use a guarantor - a family member can support the application
- Offset with other assets - superannuation, savings, or other property can reduce the cash component
- Sell the property - sometimes the most practical path forward
Stamp duty on buyouts
If you have Consent Orders or a BFA, the property transfer from your ex to you is exempt from stamp duty in every state. Without formal orders, you will pay full stamp duty - which on a $400,000 half-share could be $10,000-$20,000 depending on your state.