Could you keep the house on your income?

Keeping the family home after a separation usually means two things at once: paying out your former partner's share of the equity, and refinancing the loan into your own name. The starting point is the property settlement itself, where the asset pool is assessed under the Family Law Act 1975 (Cth) (section 79 for married couples, section 90SM for de facto couples). Our house buyout calculator can help you estimate the payment figure, and this tool tests whether the loan that follows would fit your income.

A bank will treat your refinance as a fresh loan application, even if you have paid the existing mortgage faultlessly for years. They assess your income on its own, apply benchmark living expenses, count your other debts, and test the repayment at a buffered interest rate, typically about 3 percentage points above the rate on offer. As a rough guide, repayments under 30% of after-tax income are generally comfortable, while anything over 40% is usually considered mortgage stress.

Two practical points matter here. First, lenders are not bound by family court orders: if your name stays on a joint loan, you remain fully liable until it is refinanced or paid out, no matter what the orders say. Second, transfers of the home between separating spouses under court orders or a binding financial agreement are generally exempt from transfer (stamp) duty in most states and territories, which can make a buyout cheaper than buying on the open market.

There are also time limits to formalise a settlement: 2 years from separation for de facto couples and 12 months from the divorce order for married couples. If the repayment looks like a stretch, that is information, not a verdict on you. A smaller loan, a longer term, or selling and splitting the proceeds can all leave you more secure than holding a house you cannot comfortably afford.