In Australia, you generally cannot remove someone's name from a mortgage without refinancing because lenders require a new loan application to release the other party from liability, as the existing loan contract binds both individuals. Removing a name from the property title (ownership) is separate and requires forms, stamp duty (with potential exemptions for relationship breakdowns), and the lender's consent for the loan, making refinancing the standard path to sever financial ties completely, notes Aussie Home Loans and Australian Family Lawyers.
Yes, it's possible. If you're going through a separation or divorce and share a mortgage, this guide will help you understand your options when it comes to transferring the mortgage to one person. Your home may be repossessed if you do not keep up repayments on your mortgage.
Loan assumption lets one borrower take over the existing mortgage—rate and all—without refinancing, making it one of the simplest ways to remove someone from a home loan. Pros: Keeps the original mortgage rate and terms. Avoids the cost and hassle of refinancing.
The costs vary widely depending on your specific circumstances but in general these are some of the costs you'll have to pay: Lodgement fee. This is the fee charged by the government for processing the change in title. The cost varies but costs around $150 in several states.
If you're both named on the mortgage, you're both responsible for the payments - including any arrears - even if one of you moves out. When you separate, you might be able to make other arrangements for paying it.
A transfer of equity can be a good way to add or remove someone from your mortgage without remortgaging. However, there are some risks involved, so it's important to understand all the steps before getting started.
Moving out during a divorce is often considered a big mistake because it can create a "status quo" that hurts your case, especially regarding child custody, as courts favor stability, making it seem like the other parent is better suited for primary care; it also creates immediate financial strain by forcing you to pay for two households, risks losing access to vital financial documents and personal belongings, and can be interpreted as abandonment, weakening your negotiating power and potentially affecting asset division.
Steps involved in changing property ownership
Removing your name from your mortgage can impact your credit score in multiple ways, although the extent of that impact may vary depending on your circumstances.
You can request the novation from your lender. In novation, you can request to replace the co-applicant with another person or only with the primary applicant. However, you need to check whether your loan agreement allows for the same.
To remove a cosigner, the primary borrower must be able to qualify for a new mortgage independently. Financial stability, including a good credit score and steady income, will be needed for the homeowner to remove a cosigner. Refinancing is one option but involves costs, typically 2% to 5% of the new mortgage amount.
The most common examples are gifted and inherited assets. Money or property given to one spouse as a gift, or received through an inheritance, is generally considered separate property and cannot be touched in a divorce, as long as it has been kept separate.
The process can take up to one or two months in total, but with an expert mortgage advisor and solicitor in your corner, it can be much quicker than you imagine. Where there is enough equity in the property, the partner taking on the mortgage can often find themselves making even lower payments.
The rule requires the buyer's solicitor to inform the lender when a seller is attempting to sell the property when the seller was registered at the land registry less than six months prior to the agreed sale. The lender will not usually lend in that case.
The cost is usually between £100 and £200, which is the average cost of remortgage processing. That's easy. But there are times when it's not easy. Sometimes, one party wants to be removed from a joint mortgage, and the other party doesn't agree.
You will need to instruct a solicitor and provide us with their details, including their name and address. Any legal fees in relation to the change will be payable directly to them. All applicants will need to provide us with proof of income.
For most people, increasing a credit score by 100 points in a month isn't going to happen. But if you pay your bills on time, eliminate your consumer debt, don't run large balances on your cards and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.
If the sale price is less than the market value of the property, the 'market value substitution rule' will apply, meaning the tax office will deem you to have received the market value of the asset at the time of the transfer.
As noted above, the most common type of deed used when gifting a home is the quitclaim deed. This is because a quitclaim deed simply transfers whatever ownership interest the grantor has in the property without making any guarantees about the title's validity.
Co-ownership might entail more complex legal agreements, specifically outlining each party's rights and responsibilities. Joint property ownership usually involves a simpler, more standardised agreement.
The four behaviors that predict over 90% of divorces, known as Dr. John Gottman's "Four Horsemen," are Criticism, Contempt, Defensiveness, and Stonewalling, which erode connection, respect, and safety, leading to relationship breakdown. These destructive communication patterns, if persistent, signal that a marriage is likely to end, with contempt being the most damaging.
The biggest mistake during a divorce often involves letting emotions drive decisions, leading to poor financial choices, unnecessary conflict, and detrimental parenting arrangements, with other major errors including hiding assets, not seeking early legal advice, and failing to prioritize the children's needs. Rushing the process or trying to "win" by being nasty instead of focusing on fair, transparent outcomes also causes significant long-term damage, costing time, money, and emotional well-being for everyone involved, especially children.
Should You Move Out? None of this is to say you can't move out during a divorce. You may need to, especially if a living situation becomes unsafe. But in general, unless the court specifically orders you to, or it's a safety issue, we don't recommend vacating until temporary orders are in place.
Obtain lender approval
If your lender wants to, they have the power to remove someone's name from the mortgage without needing to refinance.
If you don't want to remortgage, you can ask your lender to add someone on to your current mortgage, assuming they pass all the affordability checks. This is known as 'transfer of equity.