When someone dies, their mortgage does not end. If the home was owned as joint tenants, the survivor becomes the sole owner and stays liable for the whole loan. If it was owned in one name or as tenants in common, the share passes through the estate, and the executor deals with the lender. Life insurance or a sale often clears the debt.

What happens to the home and the loan
How the home was owned Who owns it now Who deals with the loan
Joint tenants The surviving owner, automatically The surviving borrower
Tenants in common The deceased’s share passes under the will The executor, with the co-owner
Sole name The estate, under the will The executor

What happens if you owned the home as joint tenants?

Joint tenancy carries a right of survivorship: the surviving owner takes the whole property. In NSW the survivor updates the title by lodging a Notice of Death with NSW Land Registry Services, with no transfer duty. If the property is mortgaged, the lender generally needs to consent to the notice being registered. As a joint borrower, the survivor is liable for the full loan, not half of it, so the repayments continue.

What happens if the home was in one name or held as tenants in common?

The deceased’s interest becomes part of their estate. The executor named in the will, usually after obtaining probate from the Supreme Court of NSW, deals with the lender. The estate can keep paying the loan, sell the property to repay it, or transfer it to a beneficiary who refinances. A beneficiary inheriting a mortgaged home usually needs to qualify for the loan in their own name to keep it.

Does the bank call in the loan straight away?

Usually not. Lenders have teams for deceased estates and generally give the family time while probate is obtained and decisions are made, as long as the lender is told and kept informed. Repayments still fall due, so tell the lender early and ask what arrangements are available. If paying is a struggle, ask about hardship options; see mortgage hardship help.

Which insurance and super can help?

  • Life insurance, held personally or inside super, can pay a lump sum to the estate or a nominated beneficiary.
  • Super death benefits are paid by the fund to dependants or the estate, depending on the nomination.
  • Mortgage protection insurance, if taken out, may cover the balance or repayments.

Lenders mortgage insurance does not help the family: it protects the lender. The guide to lenders mortgage insurance explains the difference.

What about a negatively geared investment property?

The 2026 changes to negative gearing exempt properties held on Budget night. As passed, an existing jointly owned property could lose that exemption when it passes to the survivor, and the Government has said a further bill will address it. Ask your tax agent about the current position; the article on negative gearing changes explains the rules.

What should the family do first?

  1. Tell the lender, with a death certificate when you have it.
  2. Find the will and the executor; check how the home is held on the title.
  3. Contact insurers and super funds about any death benefit.
  4. Keep paying, or ask the lender about hardship arrangements.
  5. For joint tenants, ask a conveyancer about the Notice of Death.

How long does the estate take?

Probate in NSW commonly takes a few months once the application is complete, and selling or transferring a property adds settlement time on top. Lenders know this. What helps is regular contact, an executor who can show the plan, and repayments kept up where possible. If the plan is to sell, the lender is repaid from the sale at settlement and the rest goes to the estate.

Can the survivor keep the home on one income?

Often, with the right structure. If the loan was assessed on two incomes, the lender may want to see that the survivor can manage it, especially if the loan is changed or refinanced. Insurance proceeds that reduce the balance help a great deal. A broker can compare lenders and work out what is affordable; the borrowing power calculator gives a first estimate on one income.

Questions people ask

Do I have to pay my partner’s share of the mortgage?

If you were joint borrowers, yes: each borrower is liable for the whole loan, not just half.

Can the bank sell the house when the owner dies?

Only if the loan is not repaid under its terms. Lenders usually work with the family or the estate while the next steps are sorted out.

Do children inherit a parent’s mortgage?

Children inherit the property subject to the mortgage, not the debt personally. To keep the home, they usually need to repay or refinance the loan.

Who makes the mortgage payments after someone dies?

The loan still has to be paid. A surviving joint borrower keeps paying; where the loan was in one name, the executor deals with the lender and the payments usually come from the estate, an insurance payout or a sale. Contact the lender early to explain the situation and ask what arrangements it offers.

Charles Touma helps families and executors work out whether the loan can be kept, refinanced into a survivor’s name or repaid from a sale. A free 30-minute call covers the options, with no pressure on timing. General information only, not credit, legal or tax advice.

Sources: NSW Land Registry Services, Notice of Death; Moneysmart, losing your partner; Moneysmart, claiming a super death benefit; ATO, negative gearing and capital gains tax reform, checked 18 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.