Guide
Separation year and German mortgage: why you should sort it out now
The mortgage usually continues unchanged through separation. Waiting too long risks joint liability, tax disadvantages and costly mortgage decisions.
What applies as regards the bank?
The separation year does not change the loan agreement. If both spouses signed the mortgage, both remain liable to the bank.
The bank is not bound by private arrangements. If one partner stops paying, the bank can in principle pursue both borrowers. This is why it is important to clarify during the separation year who is making the payments and what long-term solution is planned. A verbal agreement is not sufficient for the bank.
Why the separation year can matter for tax
Real estate transfer tax by federal state
up to 6.5%
of the property value
On transfers between spouses
poss. € 0
tax exemption possible
Time window
Separation year
before divorce is finalised
If one partner takes over the other's share, the timing can be financially significant. After the divorce the assessment can become more complex. Tax details should be checked individually.
What options exist during the separation year?
Partner takes over the property
This requires bank approval, viable financing and usually a notarial transfer of ownership.
Change of borrower
One partner is released from the loan while the loan itself continues. This requires bank approval.
Sell the property
The loan is then repaid from the sale proceeds. An early repayment penalty must be checked.
What happens if you do nothing?
If you do nothing, the loan generally remains unchanged. Both borrowers continue to be liable.
This can be particularly problematic if one partner moves out and the other occupies the property. Occupation and liability then diverge emotionally and financially.
Future borrowing can also become more difficult. As long as you remain in the old loan, a bank will take that obligation into account for new credit applications. Inaction can also weaken your negotiating position: decisions made shortly before the divorce or under acute financial pressure are often worse.
What should you prepare during the separation year?
Gather the loan agreement, repayment schedule, remaining debt and information on the fixed-rate period. Also check overpayment rights and possible termination dates.
Establish a realistic property value and clarify who wants to keep the property. Speak to a mortgage adviser early — that way you know which solution the bank is likely to accept and where the risks lie.
Frequently asked questions
Use the separation year to make clear decisions
The earlier you review the loan, ownership and liability, the more options remain open. Thomas Brauner advises you free of charge and without obligation.