Buying out your ex

What does buying out mean?

Buying out your ex-spouse means paying them their share of the equity in the family home so that you become the sole owner. The property stays yours, your ex walks away with cash, and you both move on.

Example: Your home is worth £400,000 with a £200,000 mortgage, giving equity of £200,000. If you’ve agreed a 50/50 split, you’d need to pay your ex £100,000 to buy out their share.

Can you afford it?

Before committing to a buyout, honestly assess whether it’s financially realistic:

Mortgage affordability

You’ll need to qualify for a mortgage on your own income. Lenders typically lend 4-4.5 times your annual income. If you earn £40,000, you might borrow around £160,000-£180,000.

The new mortgage needs to:

• Pay off the existing mortgage
• Provide the buyout payment to your ex
• Cover any costs

Monthly payments

Can you afford the mortgage payments from your income alone? Include all costs:

• Mortgage repayments
• Buildings insurance
• Maintenance and repairs
• Council tax
• Utilities

If you’re receiving spousal maintenance, some lenders will consider this as income, but not all.

Child maintenance

Child maintenance received isn’t usually counted as income by lenders, as it’s considered temporary. Don’t assume you can use it to boost your borrowing capacity.

Agreeing the buyout figure

How much is the property worth?

You need an accurate property valuation. Options include:

• Estate agent valuations – free but potentially optimistic
• RICS surveyor valuation – independent and reliable (costs £300-500)
• Agreed figure – you both agree a value without formal valuation

If you disagree on value, consider instructing a joint surveyor whose valuation you both accept.

Calculating equity

Equity = Property value – Mortgage outstanding – Selling costs

Even if you’re not selling, deduct notional selling costs (estate agent fees around 1-2%, legal fees around £1,500) to work out the net equity that would be available if you sold. This is fair because selling would incur these costs.

Your share vs their share

The split doesn’t have to be 50/50. Your consent order might specify:

• 50/50 split
• 60/40 or 70/30 based on overall settlement
• A fixed sum regardless of equity

Make sure the buyout figure is clearly set out in your consent order.

The buyout process

Step 1: Agree the terms

Agree with your ex:

• The property value (or get it valued)
• The buyout figure
• The timeline for completion

Include these terms in your consent order.

Step 2: Apply for a new mortgage

You’ll need to:

• Find a lender willing to offer the amount you need
• Pass affordability checks on your own
• Get a valuation for the new lender
• Complete the mortgage application

This takes 4-8 weeks typically.

Step 3: Complete the transfer

Once your mortgage is approved:

• Your solicitor prepares the transfer deed
• Your ex-spouse signs off their share
• Your new mortgage pays off the old one
• Your ex receives their buyout payment
• You become the sole owner

Step 4: Update records

Ensure:

• Land Registry records show you as sole owner
• Your ex is removed from the mortgage
• Home insurance is in your name
• Council tax records are updated

Costs involved

Legal fees

You’ll need a solicitor for the transfer of equity: typically £500-£1,000 plus disbursements.

Mortgage costs

• Arrangement fee (typically £500-£2,000)
• Valuation fee (often included in mortgage deal)
• Mortgage advice fee (may apply)

Stamp duty

If you’re buying out your ex as part of a divorce settlement, you may be exempt from stamp duty on the transfer. Your solicitor can confirm whether the exemption applies.

Early repayment charges

If your existing mortgage has early repayment charges, factor these into your calculations.

What if you can’t afford to buy out?

If the numbers don’t work:

Consider a smaller buyout – can you agree a different split that makes the mortgage affordable?

Deferred sale – stay in the property now, with your ex retaining a share to be paid when you eventually sell.

Offset elsewhere – keep the property but give your ex more of other assets (pensions, savings) instead of cash.

Selling – sometimes the fairest option is to sell and both start fresh.

Protecting your position

Get it in writing

The buyout terms must be in your consent order. This protects both parties:

• Your ex knows they’ll receive their payment
• You know they can’t later claim more

Timeline

Set a realistic timeline for completing the buyout. If you need time to arrange the mortgage, specify this in the order.

What if circumstances change

If you can’t complete the buyout by the agreed date (mortgage refused, for example), your consent order should specify what happens – perhaps the property goes up for sale instead.

Alternatives to cash buyout

Pension offset

Instead of cash, your ex keeps more of the pension wealth while you keep the property. This requires careful valuation of both assets.

Deferred payment

You stay in the property and pay your ex their share when you eventually sell, or when children reach 18. This is formalised in a Mesher order.

Charge on property

Your ex retains a legal charge on the property for their share, to be paid from eventual sale proceeds. They don’t receive cash now but have a protected claim.