Separation is one of the most emotionally difficult and financially complex events in life. If you’ve shared a mortgage with your partner, one of the biggest questions post-separation is: What happens to our home loan now?
For many, the answer lies in refinancing. Whether you want to stay in the family home or move on, refinancing after separation can give you the financial independence and clarity you need to move forward.
In this article, we’ll explain how refinancing works after separation, what lenders look for, and how a mortgage broker in Australia can help you secure the best possible outcome.
Why Refinance After Separation?
There are a few common reasons people choose to refinance after separating:
- To buy out your partner’s share of the home
- To remove your ex’s name from the mortgage
- To secure a more affordable interest rate
- To adjust repayments to suit a new income structure
- To fund a fresh start with a new property purchase
If you’re in any of these situations, refinancing may be the most efficient way to take control of your financial future.
How Does Refinancing Work?
When you refinance, you’re essentially replacing your current home loan with a new one. This could involve:
- Changing lenders
- Adjusting the loan term
- Negotiating a new interest rate
- Reassessing your borrowing capacity as a single applicant
A mortgage broker helps you compare refinancing options across 50+ lenders, manage the paperwork, and make sure your new loan suits your new lifestyle.
What Lenders Look At After Separation
Lenders assess refinancing applications based on several key factors:
- Your individual income (including full-time, casual, self-employed or contract work)
- Expenses and financial commitments (including child support or spousal maintenance
- Credit score
- Assets and liabilities
- Loan-to-Value Ratio (LVR)
- Any settlement agreement terms if relevant
If your financial situation has changed significantly post-separation, a broker can help present your application in the best possible light.
5 Key Refinancing Scenarios Post-Separation
1. Buying Out a Partner
You want to remain in the family home and take over the mortgage.
✅ Your broker will:
- Arrange for the existing loan to be refinanced into your name only
- Work with a lender to determine how much equity is needed to pay out your ex
- Negotiate a loan that fits your new income and budget
2. Selling and Starting Over
You plan to sell the home and buy a new property on your own.
✅ A broker can:
- Help you understand how much you’ll walk away with after the sale
- Assess what you can borrow as a first home buyer again, single applicant, or low deposit borrower
- Compare fixed, variable, or split loan options
3. Reducing Repayments After a Split
You need to adjust your mortgage so it’s more manageable on one income.
✅ A broker may:
- Suggest refinancing to a longer loan term
- Help you find a low interest rate or interest-only mortgage
- Identify lenders who work with self-employed or casual income borrowers
4. Low Income or Single Parent Situation
You’re concerned you won’t qualify.
✅ Don’t worry. Brokers have access to:
- Low income mortgage options
- Government support programs
- Low deposit lenders
- Single parent home loan programs (including those with guarantees)
5. Bad Credit or Debt Challenges
Your financial position has taken a hit during the separation.
✅ A broker can:
- Recommend lenders who accept bad credit applicants
- Help you consolidate existing debt through your refinance
- Guide you through debt-to-income ratio management to improve approval chances
What Are the Costs of Refinancing?
A good broker will always outline fees up front, but here are a few common costs:
- Discharge fee from your current lender
- Application fee for the new loan
- Valuation fees
- Legal/admin costs
- Lenders Mortgage Insurance (LMI) if borrowing over 80% LVR
The good news? These costs are often rolled into your new loan, and the savings from a lower interest rate can far outweigh them in the long run.
How a Mortgage Broker Makes Refinancing Easier
Refinancing is complex at the best of times—but during separation, it’s often emotionally exhausting too.
A broker helps by:
- Comparing refinancing rates in Australia
- Recommending bank vs broker home loan options
- Managing lender communications
- Handling paperwork
- Ensuring your loan structure fits your life now (offset account, redraw, etc.)
Many of our clients at Money Tree Mortgage Brokers tell us that working with a broker made the whole process easier, faster, and less stressful.
Real Client Example: Ben’s Refinance Story
Ben separated from his partner of 12 years. He wanted to keep their home for his two kids but was unsure if he could afford the mortgage alone.
“I honestly thought I’d have to sell. But my broker worked out how much I could borrow, found a lender who would accept my overtime income, and negotiated a lower interest rate. We refinanced, I stayed in the home, and my repayments are now lower than they were before.”
When Is the Right Time to Refinance?
Timing can be crucial, especially during separation. Consider refinancing:
- After a settlement agreement is reached
- When you have a clear picture of your future income
- Once your credit score is reviewed and optimised (we can help)
Your Checklist: Ready to Refinance?
✅ Income details (payslips, tax returns)
✅ Monthly expenses and debts
✅ Property value (we can organise a valuation)
✅ Legal separation or property settlement documentation
✅ Savings or equity for refinancing
✅ A trusted mortgage broker (we know a few 😉)
Let’s Get You Sorted
Refinancing after separation doesn’t have to be scary — not when you’ve got the right support. At Money Tree Mortgage Brokers, we specialise in helping Australians move forward after a relationship ends.
We’ll help you:
- Understand your options
- Get a clear picture of your borrowing power
- Compare loans across 50+ lenders
- Secure terms that give you peace of mind and financial freedom
