My companion and I break up – ought to we maintain our joint £300k mortgage? DAVID HOLLINGWORTH replies

We have a two-year fixed rate mortgage which comes to an end next June.

My partner and I separated but maintaining the mortgage payments. We pay 50/50.

We have £300,000 left on our mortgage and about 25 years. He still wants us to keep the mortgage together to get better rates and think us changing anything will only impact our mortgage.

What are my options? What should I bear in mind when we are shopping around for our remortgage next year?

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Mortgage help: Our weekly Navigate the Mortgage Maze column sees broker David Hollingworth answering your questions

David Hollingworth replies: It sounds as though you still have a good relationship with your ex-partner, which should make any decisions about the best move going forward easier to discuss.

It’s not clear if you’ve both remained in the property after the separation or if only one of you has left and the other is now living alone in the property but you continue to manage the mortgage between you. 

The latter is perhaps the more likely scenario, but your living situation is likely to have a big bearing on how you decide to tackle the ongoing ownership.

The biggest question you will both face looking ahead is how the joint mortgage could impact your plans for the future.

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Future impact

If we assume that your ex-partner is now living elsewhere, they may well want to buy their own home at some point. 

There will be an impact on their ability to take a new mortgage on a new home. Any lender will need to be able to demonstrate that the mortgage will be affordable so will look not only at income but also at outgoings.

That will include the existing commitment of the current mortgage. Joint borrowers are jointly and severally liable, so the lender will factor the whole mortgage into its affordability calculation. 

They will need enough income to cover both mortgages and if not, their ability to buy a property could be seriously curtailed.

Buying a new property could also require your partner to draw out their equity in the current property to put towards the new purchase. 

If you wanted to remain in the current property then you would ultimately need to buy out your ex-partner. 

That could mean taking on the mortgage plus any additional borrowing required to cover your ex-partner’s stake in the property. You would also need some legal advice.

Transfer the Equity

Lenders can allow you to transfer the equity and take one name off the mortgage but they will need to see that the remaining borrower can afford the mortgage in their own right. 

If your income alone isn’t adequate to cover the mortgage and any additional borrowing, the lender won’t release the borrower. 

That could mean that the property would need to be sold and the equity split for you to go your separate ways.

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Your relationship is good at the moment but would the desire to continue the mortgage in joint names if you meet another partner persist? 

If one of you stopped paying the mortgage then it would have an impact for both of your credit files. These ‘what if’ scenarios are worth considering and discussing before locking into a new rate.

Shopping around

The level of income between you could also play a factor in deciding the mortgage options that are open to you. 

The existing lender will no doubt offer options for you to switch onto and should not need a full affordability check, as long as there’s no material changes made to the current mortgage.

However, that may not represent the very best deal in the market. Shopping around for a new mortgage deal would require a new lender to undertake an affordability assessment. 

With both incomes that could give the chance to take a deal elsewhere, subject to any additional outgoings that may need to be factored in eg if your ex-partner is paying rent or either of you has taken additional credit since the existing mortgage was taken.

If you do go ahead and decide to both remain joint on the mortgage, think about how long you want to lock in for or whether a shorter-term product or penalty-free deal could give valuable flexibility.