Separation or divorce is never easy, emotionally or financially. For separating couples who own property together, one of the biggest questions is: can I refinance my home loan to pay out my ex?
The short answer is yes — in many cases (dependent on the circumstances) it may be possible to refinance your home loan to buy out your former partner’s share of the property. But there are a few important steps, considerations, and lender requirements you’ll need to work through first.
How refinancing to pay out an ex works
If one partner wants to keep the property after a separation, a refinance can allow them to take over the existing home loan in their own name, and borrow enough to pay out their ex’s share of the equity in the home.
Essentially, the refinance replaces your joint mortgage with a new loan in one name only — just like any other refinance — but it also includes an amount to compensate your ex-partner for their ownership portion.
Step 1: Determine the property’s value and equity
The first step is to get a clear idea of the current market value of your home. You can do this via a real estate appraisal or a formal valuation arranged by your lender (which is often required).
Once you know the property’s value, subtract the remaining loan balance to find your available equity.
For example: if your home is worth $800,000 and your loan balance is $400,000, there’s $400,000 in equity. If you and your ex are splitting ownership 50/50, you’d need to refinance for an additional $200,000 to pay them out.
Step 2: Check your borrowing capacity
Next, the lender will assess whether you can afford the new loan on your own. They’ll look at your income and expenses, credit history, other debts, and any child support or spousal maintenance obligations.
Because you’re moving from two incomes to one, your borrowing power may be lower — but this is where working with an experienced mortgage broker can make all the difference. A broker can help find a lender that fits your situation and structure the loan in the most affordable way.
Step 3: Settling the payout
Once your refinance is approved, your new lender will pay out your old joint loan and transfer the agreed equity amount to your ex-partner (or their solicitor’s trust account). At that point, the property title is transferred into your sole name, and the old loan is closed.
It’s also wise to ensure your legal property settlement and consent orders are in place before settlement — your solicitor or family lawyer can assist with this.
Step 4: Costs to consider
When refinancing to pay out a partner, you’ll need to budget for: refinance and discharge fees from your old lender, stamp duty exemptions (in WA, transfers due to relationship breakdowns are usually exempt, but check eligibility as this is case by case), solicitor or conveyancing fees, and valuation and loan application fees (often waived with the right lender).
A mortgage broker can help estimate these costs upfront and ensure the loan amount covers everything you need.
Alternatives if you can’t refinance right now
If your income or credit situation makes it hard to refinance immediately, there are still options. You could sell the property and split the proceeds, wait and reapply later once your circumstances improve, or use a guarantor (such as a family member) if your lender allows it.
Every case is unique, and a tailored lending strategy can often open up paths that seem out of reach. Read more about potential options for your home loan after divorce here.
How a mortgage broker can help
Separation can make the financial side of home ownership feel overwhelming. An experienced mortgage broker can help you assess your new borrowing capacity, compare lenders who accept refinance-for-payout applications, structure your loan for flexibility and future stability, and work alongside your lawyer to ensure the settlement runs smoothly.
At Base Home Loans, we’ve helped many clients in Perth and across Australia refinance after separation, with sensitivity, clarity, and a focus on financial empowerment.
The bottom line
Yes, it’s possible to refinance your home loan to pay out your ex — but success depends on having the right strategy, valuation, borrowing capacity and lender fit. With the right advice, you can move forward with confidence, potentially keep your home, and start the next chapter with a plan in place.
Disclaimer: The information provided on this blog is for general informational purposes only and does not constitute financial or professional advice. While we strive to provide accurate and up-to-date information, mortgage laws and regulations can change, and individual circumstances may vary. We recommend consulting with a qualified financial advisor or mortgage broker to assess your specific situation and needs. Base Home Loans is not responsible for any actions taken based on the content of this blog. Always conduct your own research and consider seeking professional advice before making financial decisions. The examples used here are illustrative in nature and do not reflect any actual people or clients.
