Home loans after separation or divorce

Most separating couples who own a home together end up doing one of three things:

• One of you keeps the home and refinances the loan into your own name, borrowing extra to pay the other person their share. This is often called buying out your former partner.
• You sell and divide what is left after the loan is repaid, and each of you buys or rents again on your own.
• You keep owning it together for a time, for example until the children finish school. Both of you stay responsible for the whole loan.

If one of you keeps the home, or you each buy again, the lender looks at you as one borrower with one income from here on. That is the question the rest of this guide answers.

To keep the home, you apply for a new loan in your name only. It pays off the joint loan and pays your former partner their share under your settlement. The lender assesses whether you can afford the whole new loan on your own income and expenses (lenders call this serviceability), which is the same test as any other application.

• The payout is usually treated as cash-out. Most lenders treat the money paid to your former partner as cash-out (borrowing against your equity, the share of the home's value you own outright once the loan is taken off, for another purpose) rather than a straight refinance. Most lenders will go to 90% of the property's value on a buyout, and some will consider 95%.
• The value is checked. You and your former partner often agree on a value from an independent valuation, but the lender orders its own, and it can come in lower. A lower value means a higher LVR (your loan as a share of the property's value): borrowing $550,000 against a home valued at $820,000 is an LVR of about 67%.
• Your share of the equity counts. The equity you keep in the home works like a deposit. Most lenders also accept money from a property settlement as a deposit for a new purchase, with no minimum time it has to sit in your account.
• LMI works as it does on a purchase. If you borrow more than 80% of the value, expect lenders mortgage insurance (LMI, insurance that protects the lender when your equity is small, and which you pay for), the same as when you buy.

Source: Xandii broker guidance, October 2026.

It's worth knowing your borrowing power before you agree the settlement figure, so you don't agree to a payout that's more than lenders will let you borrow. Our home loan comparison tool gives an indication with each lender in a few minutes: enter your current loan as one you are refinancing.

A lender wants to see the agreement you've reached in a form that binds you both. There are two ways to make one: consent orders, which the Federal Circuit and Family Court makes when you file the terms you've agreed, or a binding financial agreement, which you each sign after independent legal advice. Most lenders accept consent orders on their own; you don't need a financial agreement as well.

You don't need to wait for the orders to start. A lender can approve the loan before the orders are signed, but an approval usually lasts about 90 days, and the signed orders are needed before the loan can settle. If the orders take longer than that, you apply again. So it pays to apply when the orders are close, not months before.

Source: Xandii broker guidance, October 2026.

You also don't need to be divorced first. You can only apply for a divorce once you have been separated for 12 months, which can include time separated while still living under the same roof, but property orders can be made before then. There are time limits the other way: a married couple's property claim should be made within 12 months of the divorce order taking effect, and a de facto couple's within 2 years of separating, unless the court allows a later one.

Source: Family Law Act 1975, sections 44, 48 and 49, read 16 October 2026.

Moving the home into one name is a transfer of property, which normally attracts stamp duty. A transfer made under court orders or a binding financial agreement is exempt from stamp duty, or charged only a nominal amount, in every state and territory. The conditions differ by state: in Queensland, for example, the order or agreement must come before the transfer and name the property, and in some states the exemption has to be claimed, so ask your lawyer or conveyancer to claim it. Victoria also exempts a transfer made only because the relationship has broken down, even without orders or an agreement. A buyout done informally elsewhere can mean paying ordinary stamp duty on the share you take over. Our stamp duty calculator does not apply this exemption, so don't rely on it for a transfer between former partners.

Source: Family Law Act 1975, sections 90, 90L and 90WA, and the state revenue offices, including the Queensland Revenue Office, matrimonial exemption (updated 13 May 2026), and the State Revenue Office Victoria, marriage or relationship breakdown and duty (updated 14 October 2026), read 16 October 2026.

The same documents matter for tax. If the home passes to you under court orders or a binding financial agreement, capital gains tax on your former partner's share rolls over to you, to be worked out only when you sell (the rollover then applies automatically; it isn't optional). An informal arrangement doesn't qualify. How the main residence exemption then applies depends on how you both used the home. Your lawyer and accountant can tell you how this applies to you.

Source: Australian Taxation Office, relationship breakdown and capital gains tax (updated 22 June 2026), read 16 October 2026.

Child support normally continues until a child turns 18, and can be extended to the end of their final school year. Lenders don't treat it that way.

Source: Services Australia, child support when your child turns 18 (updated 10 August 2026), read 16 October 2026.

• Child support you receive. Most lenders count all of it, and some count about 80%. Many count it only alongside a salary, not as your main income. They usually want the Child Support assessment notice and about six months of bank statements showing the payments arriving. If you have a private arrangement instead, some lenders will still count it when it is paid into your account consistently, the same amount at the same times; others want it registered with Child Support. Most lenders stop counting child support for a child once that child turns about 13, and some at 11, because by then fewer years of payments are left.
• Child support you pay. Lenders count the full amount as a commitment, from your assessment and bank statements, until each child turns 18.

So the same payments can count for less, for a shorter time, when you receive them than when you pay them. If a child is close to 13, a broker can tell you which lenders will still count it.

• Spousal maintenance you receive (money a former partner pays to support you) is not usually counted. Some lenders will consider it case by case if it has been paid consistently, your bank statements show it, and your court orders say how long it will be paid.
• Family Tax Benefit depends on the lender: some count Part A only, some count Parts A and B, and most stop counting it once the child turns 11 or 13.

Source: Xandii broker guidance, October 2026.

Our comparison tool asks for any child support you receive, but it doesn't know your children's ages, and lenders treat child support so differently that the figures are a starting point. A broker confirms what each lender will count.

Until the joint loan is refinanced or paid off, or the lender agrees to release one of you, you are both responsible for all of it, not just half. If a repayment is missed, it can show on both of your credit files, whoever was meant to pay. Moving out doesn't change that.

• If the loan has fallen behind, a new lender treats it like any home loan in arrears: it needs to be brought up to date, and usually only a non-bank lender will consider you until it is.
• Joint debts are usually cleared at settlement. Consent orders normally require every joint debt, the home loan included, to be paid out or refinanced into one person's name. Debts your former partner is taking on can be made a condition of your settlement, so they are cleared when your new loan settles and left out of your assessment.
• If your name is still on the old loan, lenders count it as your debt, whatever your orders say about who pays it. So it pays to have it refinanced or paid out before, or at the same time as, you borrow again.

Source: Xandii broker guidance, October 2026.

Most lenders also assess your living expenses as a single household once you've separated, even if you're still married or still living under the same roof. They use the higher of what you tell them and their own minimum for a household like yours (the Household Expenditure Measure, or HEM).

Source: Xandii broker guidance, October 2026.

The single parent scheme. The government's 5% Deposit Scheme for Single Parents (formerly the Family Home Guarantee) lets a single parent or legal guardian of a dependent child buy with a 2% deposit and no LMI. You don't need to be a first home buyer, there is no income cap, and the home must be under the price cap for its area. Two rules matter after a separation:

• If you are separated but still married, you aren't eligible until the divorce. A de facto partner counts as single once you no longer live together as a couple.
• It can help you keep the family home. You can use the scheme to buy out your former partner's share and keep the home in your name alone, as long as the home is under the price cap for its area and, if you were married, you are divorced first.

Source: Australian Government 5% Deposit Scheme for Single Parents Information Guide (1 July 2026), sections 2.2 and 2.5; Xandii broker guidance, October 2026, read 16 October 2026.

First home grants and first home stamp duty concessions are usually for people who haven't owned and lived in a home before, and the rules vary by state, so they generally don't apply if you owned the family home. If you were never on the title, you may still qualify, although some states also count a home your spouse owned; check with your state revenue office. The government's 5% Deposit Scheme for first home buyers looks back 10 years, including homes owned with a former partner.

Source: Queensland Revenue Office, first home grant eligibility (updated 5 August 2026); Australian Government 5% Deposit Scheme Information Guide (1 July 2026), read 16 October 2026.

This is an illustration, not a quote.

Mel: a single parent in Brisbane whose two children live with her most of the time. She is keeping the family home after separating, refinancing the joint loan into her own name and paying her former partner their share under consent orders. She has been in her full-time job for six years and has no other debts.

Salary

$130,000 a year

People on the loan

1, with 2 children aged 7 and 10

Living expenses

$3,500 a month

Home value

$820,000 (Brisbane)

Joint loan being paid off

About $430,000

Paid to her former partner

$120,000

New loan

$550,000, owner-occupied, 30 years

What moved the figure

• Your consent orders or binding financial agreement, or the draft terms if they aren't signed yet.
• A recent statement for the joint loan, and the agreed value of the home if you have one.
• Your two most recent payslips and your latest income statement or tax return.
• If you receive child support, your Child Support assessment notice and about six months of bank statements showing the payments. If you pay it, the same.
• Any Centrelink letter showing Family Tax Benefit.
• Statements for any other debts, and a note of which ones your former partner is taking on.