How is a property bought with a housing loan divided in a divorce? Lawyer Aleksandra Andrejić explains.
A common situation: the apartment was bought with a housing loan that is not yet repaid when the marriage ends. Unlike a marriage, a loan cannot be “divorced” with a signature. Even when former spouses agree on dividing their joint property, they cannot decide on the loan without the bank’s consent; the divorce does not change the loan agreement.
Can one spouse take the property and the loan?
Spouses can agree how to divide joint property, but the agreement binds only them. The obligations under the loan stay with those who signed it. What also counts is the purpose of the loan: under the Family Law, spouses are jointly and severally liable for joint obligations, so the bank may demand the whole debt from either of them.
What happens to the mortgage?
The mortgage stays registered whatever happens to ownership: it follows the property, not the owner. If the loan is not repaid, the bank can collect from the value of the property, whoever owns it then.
Possible solutions
- One spouse takes the property and continues repaying, with the bank’s consent to the transfer of the debt.
- The property is sold and the proceeds repay the loan; any remainder is divided as agreed.
- The spouses continue repaying together until the loan is repaid or the property is sold.
Which is possible depends on the loan agreement, the bank’s policy, the spouses’ creditworthiness and their agreement. Timely legal advice can prevent long disputes and reduce financial risk.
Frequently asked questions
Does an agreement between former spouses change the obligations to the bank?
No. A change of debtor or releasing one spouse requires the bank’s consent.
Does the mortgage end with the divorce?
No. It stays until the loan is repaid or changed in line with the law and the loan agreement.
