Home loans after separation
Separation rearranges everything at once, where you live, what you earn as a household, what you owe and to whom. The lending questions land in the middle of it: can I keep the house, can I buy my partner out, can I borrow again on one income. They all have real answers, and getting them early usually makes the harder conversations easier, not harder.
Step 3 is where we come in, and it's worth running before step 1 is finalised, so the agreement is built on numbers that actually work.
Keeping the house on one income
The lender reassesses from scratch: your income alone, your expenses alone, the full refinanced amount, the existing balance plus what you're paying your former partner for their share. Equity does the heavy lifting here; years of repayments and Sydney's growth often mean the equity exists even when the serviceability is tight. Where one income can't quite carry it, there are honest levers: a longer term, restructuring other debts, or in some cases family support through a guarantee.
One fact worth knowing early: in NSW, transferring the property between separating partners under court orders or a binding financial agreement is generally exempt from transfer duty, confirm the specifics with your solicitor, but the buyout usually doesn't carry stamp duty the way a purchase would.
What lenders count as income now
Salary, obviously. Beyond it, policies differ in ways that matter: many lenders will count child support as income where it's formalised through a registered agreement and demonstrably being received; some count family tax benefits, depending on your children's ages. On the other side of the ledger, child support you pay is treated as a commitment. These policy differences between lenders are frequently the difference between an approval and a decline on the same numbers, which is precisely the situation a broker across 70+ lenders exists for.
Until the loan changes, the loan binds you
The uncomfortable one, said early: while both names remain on the mortgage, both of you are each fully liable for the whole repayment, regardless of who moved out and regardless of what you've informally agreed. Missed payments mark both credit files. Getting the lending resolved isn't paperwork tidiness; it's what actually separates your financial lives.
Buying a home again after separation
If the home is being sold or your share released, you're buying next on one income with your share of the equity as the deposit. Run borrowing power on your solo numbers before you look at listings, the figure resets expectations early, which is kinder than a lender doing it later. Depending on your history, some first-home-buyer supports may even be available again; eligibility after previous ownership is narrow and specific, so we check it rather than assume either way.
Timing it with the legal process
Lending and law run in parallel, and the sequence matters: lenders generally want the property settlement formalised, or clearly documented, before approving a buyout refinance, because until then, what you're buying isn't defined. But the numbers should run first. A twenty-minute assessment of what you can actually carry, taken into mediation, prevents agreeing to a buyout that no lender will fund. We work alongside family lawyers regularly and fit the finance to the process, not the other way around.
Separation and lending questions
Can I remove my ex-partner from the mortgage without refinancing?
Generally no. A name comes off the loan only when the lender agrees the remaining borrower can service it alone, which is assessed like a new application. Sometimes the existing lender will vary the loan; often a refinance to a new lender produces both the approval and a better rate. Either way, it's an assessment, not an administrative change.
Do I pay stamp duty to buy out my ex-partner in NSW?
Transfers between separating partners made under court orders or a binding financial agreement are generally exempt from transfer duty in NSW. The exemption has conditions, and informal transfers outside those instruments may not qualify, your solicitor or conveyancer confirms it for your documents before anything is lodged.
Does child support count as income for a home loan?
With many lenders, yes, typically where it's formalised (registered with Services Australia or under court orders), evidenced as actually received, and often with regard to how long it will continue given your children's ages. Policies differ meaningfully between lenders, so the choice of lender can matter as much as the amount.
My ex stopped paying their half of the mortgage. What now?
Protect the credit files first: the lender doesn't recognise halves, so any shortfall marks both of you. Contact the lender early, hardship arrangements exist for exactly this, and loop in your lawyer, because the missed contributions belong in the property settlement. Then move the refinance conversation forward; the situation rarely improves by waiting.
Can I buy again before the settlement is finalised?
It's harder but not always impossible, lenders want to know what you'll own and owe after the split, so an unresolved settlement clouds the assessment. Where the agreement is documented and your deposit isn't dependent on the outcome, some lenders will proceed. More often, the practical answer is to finalise first and buy cleanly second; we'll tell you which camp your situation falls into.
Related guides
General information only, not credit, legal or financial advice. Property settlements and duty exemptions are legal matters, engage a family lawyer and conveyancer for your circumstances. All lending is subject to individual assessment and lender approval.
Numbers first. Decisions second.
Twenty minutes with Charles: what one income can carry, what the buyout actually requires, and the lender whose policy fits your new circumstances, before anything is signed.
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