How to buy someone out of your house

What does it mean to buy someone out of a house?

Buying someone out of a house means taking sole legal ownership of it. You'll need to:

• Pay them their share of the equity in your home.
• Remove their name from your mortgage, if you have one.
• Complete a legal process called a "transfer of equity".

How to calculate equity

Equity is the value of the portion of your home you own outright. Knowing what equity you have is the first step in buying someone out of your home.

You can calculate your equity by taking the value of your home and subtracting your remaining mortgage balance and any other homeowner loans you have tied to the property.

For example, if your home is worth £250,000 and you have £200,000 remaining on your mortgage (excluding interest), then your equity is worth £50,000.

If you own your home outright with no mortgage, then the value of your equity is the same as the value of your property.

You may need an estate agent to value your home so that you can calculate your equity accurately.

How to split your equity

If you own your home jointly with someone, then the equity you have is also joint. But how you divide it will depend on your circumstances and any agreements you already have in place. For example:

• If you're joint tenants. Most couples who own homes together are joint tenants. This means that legally, they each own half the property and are entitled to half the equity, regardless of who has paid what towards the deposit and mortgage.
• Or, if you're tenants in common. This arrangement is less typical (though not unheard of) among couples but more usual if you own a property with a friend or family member. Tenants in common can split their ownership shares, and therefore the equity to be divided, as they wish.
• If you have an informal agreement between you on how your equity should be shared if you split up.
• The contributions you've each made towards the deposit and mortgage payments. If one of you has paid more than the other or more than the share you agreed to, then dividing your equity according to your legal entitlements or a previous agreement may not feel fair.
• Whether or not you're married. Being married can change your legal position and entitlement to a share of your joint assets.

If you disagree on how to split your equity between you or aren't sure of your legal position, speak to a solicitor. Involving solicitors can help you reach a fair decision.

How to buy someone out of a house

To give the person being bought out their share of your equity, you can:

• Pay them in cash and have their name removed from your existing mortgage (if you have one). This can be facilitated by your solicitor and happen as part of the transfer of equity process described below.
• Get a further advance on your current mortgage to borrow the money you need to buy someone out. If you're tied into your current mortgage deal, this could help you avoid early repayment charges. If this is an option for you, it can be arranged as part of the transfer of equity process.
• Remortgage to release their share of the equity. This means taking out a new mortgage in your name only for the amount you currently owe, plus the equity you need to pay.

If you are taking over your mortgage alone, whether by keeping your current deal, getting a further advance, or remortgaging, your lender will carry out credit and affordability checks to make sure you can afford the monthly payments by yourself. Remortgaging or getting a further advance may increase your monthly payments. It can also mean it takes longer to repay your mortgage in full.

However you pay the person being bought out the money they're due, you will also need a solicitor to complete a process called "transfer of equity" to legally take sole ownership of your home.

What is a transfer of equity?

Transfer of equity is the name of the process used to add or remove someone from the title deeds and mortgage on a property. You'll need a conveyancing solicitor to complete this for you. They will:

• Review the existing title deed to make sure you and the person you are buying out are the legal owners of the property.
• Check what debt is attached to the property. For example, your mortgage.
• Get a valuation of your home to confirm how much your equity is worth.
• If needed, seek your mortgage provider's permission to remove one of you for the mortgage. This usually includes getting a letter of consent from the person being bought out to confirm they agree.
• Submit the necessary legal documents to The Land Registry to update the title deeds for the property.

How long does it take to buy someone out of a house?

How long it takes to buy someone out of your house depends on your circumstances and how complicated they are. If you can pay their share of the equity in cash, then you may be able to take sole ownership of your home within 4-6 weeks. If you need to borrow money to raise the funds, then it could take longer.

Does my ex still have to pay half the mortgage?

Whether you're buying out an ex or someone else, legally, you're both responsible for making sure the mortgage is paid until the transfer of equity is complete. This is the case even if one of you has already moved out. If either of you stops paying their share for any reason, the other will have to step in and cover it.

Once the transfer of equity is complete, you will have to pay the mortgage by yourself.

What fees will I pay to buy someone out of a house?

Some of the common fees you may need to pay to buy someone out of your house include:

• Legal fees. You'll need a conveyancing solicitor to help you with the legal processes around buying someone out. The cost of this varies between firms.
• Land Registry fees. This is the cost of changing the title deed to your property. Exactly how much you'll pay is determined by the value of the equity being transferred.
• Early mortgage repayment fees. If you need to remortgage to buy someone out, you may have to pay early repayment fees and admin fees on your existing mortgage. Whether these are payable and their cost depends on your mortgage provider.
• New mortgage arrangement fees. If you're taking out a new mortgage in your own name, you'll need to pay any broker fees or arrangement fees associated with this.

What if I can't afford to buy out my ex-partner?

If you can't afford to buy someone out of your house, you won't necessarily be forced to sell up and move. You still have a couple of options for staying:

Continue owning the property together

In some situations, it makes sense to keep owning the property together. For example, if a couple has children in nearby schools and doesn't want to move them.

If this is best for you, then you will need to agree on who pays what towards the mortgage and maintenance of the home from now on. You'll also need to decide how you'll share the equity in the property when you do eventually sell. It may help to have this in writing.

Remember, without buying the other owner out, you will still be jointly liable for the mortgage (if you have one). This means that if one person fails to pay, the other must step in.

Apply for a Mesher order

A Mesher order is a court order that gives one person the legal right to continue living in a jointly owned property until a certain "trigger" event takes place. Trigger events could include:

• Your youngest child turning 18
• You remarrying or living with a new partner
• You moving into care

Mesher orders are complicated and may not be appropriate in all situations. If you're thinking about this, it's important to get legal advice.

If you're struggling financially, help is available

If you've split from your partner, your financial situation may have changed significantly. If you need help, you can get free, impartial advice from:

• StepChange
• MoneyHelper
• National Debtline
• Citizens Advice
• Money Wellness

This article is intended as information only. If you need help dividing your finances following a breakup, we recommend speaking to Citizens Advice and/or a local solicitor.