One of the largest components of any divorce is the issue of the family home. With over 1/3 of all households having a mortgage, and many divorcees also having the odd rental property or two – the case of mortgages is always high on the agenda in any divorce.

Whilst a large majority of people are on fixed rates, a more significant number than you think are on interest only – meaning many of these deals are coming to an end shortly.

For those of you who have secured a divorce financial settlement with your partner committed to making the mortgage payments into the future, the cost of living squeeze will almost certainly be biting – with the risk and fear of default against the order that you may have agreed to.

As we face a long period of high-interest rates, the ability of spouses to continue to pay mortgages will almost certainly become a bigger issue to contend with in a divorce scenario. With a significant number of divorcees being based on ‘need’, the balancing of resources to meet that need means that flexibility on both sides has to be the basis of any settlement. Whilst a spouse may wish to remain in the family home for the stability of the children, if the former husband (or wife) simply cannot afford to pay the mortgage and house themselves then something has to give. It is not a scenario anyone wants but one that is becoming all too familiar and common in the work we do in divorce.

So, some simple tips and advice for those of you facing this dilemma, either in the process of divorce or facing a default in an existing order:

  • Remain flexible and understand that there is only so much available to make all the necessary commitments
  • Make sure that any divorce settlements enable you to maximise Government support in terms of universal credit and other support systems
  • Discuss with your mortgage company the option of converting to interest only – particularly if you are committed to the long term
  • Don’t jump at selling the family home – almost certainly the cost of a new mortgage will be more than the cost of your existing home in the medium term
  • Remember the days of cheap mortgages are gone forever – so budget that rates will be at least 4% in the medium term and the impact this is going to have on your divorce settlement and your cost of living.

As always, the team at Fair-Result are here to discuss with you your options and a way forward. We specialise in achieving pragmatic and fair solutions to divorce scenarios, focussing on what is achievable both in the short term and looking to the future.

Feel free to contact Pete or Chris for an informal, free-of-charge initial discussion. Remember we are the only fixed fee divorce service in the UK focussing on financial settlement with nothing to pay until the end of the process.