Question 1

What happens to the mortgage when you separate in Australia?

Accepted Answer

Both parties remain jointly liable for the home loan until it is formally refinanced into one name, sold, or discharged. Joint liability continues regardless of who is living in the property or paying the mortgage. This can affect both parties' borrowing capacity for any new property until the matter is resolved.

Question 2

Can I refinance a home loan into my name only after separation?

Accepted Answer

Yes, it is possible to refinance a jointly held home loan into a single name following separation. The person keeping the home needs to demonstrate they can service the loan independently. This typically involves a new credit assessment, updated income verification, and a formal property valuation. A mortgage broker can assess your individual position and identify suitable lenders.

Question 3

How does a property settlement work in Australia?

Accepted Answer

Property settlements in Australia are formalised through either Consent Orders (filed with the Family Court) or a Binding Financial Agreement. Both options outline how assets and liabilities are divided. A family law solicitor should guide this process. Your mortgage broker works alongside your legal team to ensure the finance side is structured correctly once the legal agreement is reached.

Question 4

How does child support affect borrowing capacity after separation?

Accepted Answer

Child support payments you make are treated as a financial commitment by lenders and reduce your borrowing capacity. Child support received may be counted as income by some lenders, depending on the lender's policy and how it is documented. A broker can identify which lenders treat child support most favourably for your situation.

Question 5

Do I need consent orders before I can refinance?

Accepted Answer

Not always. Some lenders will proceed with a refinance based on a separation agreement or Binding Financial Agreement, while others require Consent Orders to be in place. The exact requirement depends on the lender and the specifics of your situation. Your broker can identify which lenders are most practical for your timeline.

Question 6

What is a partner buyout and how does it work?

Accepted Answer

A partner buyout is when one party refinances the home loan to pay out the other party's equity share and take sole ownership of the property. The new loan amount covers the existing loan balance plus the partner's equity entitlement, plus any associated legal or transfer costs. The new loan is assessed on the single applicant's income and financial position.

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