07 JULY, 2022

Splitting up with one’s partner is never easy, but when they share a home loan, it can be even more complicated. One of the big questions that often comes up is what will happen to their joint home loan. The couple needs to decide who will keep the property, how the EMIs will be paid off, how it will affect their housing loan eligibility, and what will happen to the home loan itself.


Here is a complete breakdown of what happens to a joint home loan after splitting up with one’s partner.

  • Negative impact on the credit score

When a couple takes out a joint home loan, their credit reputation is affected as a unit. If the couple splits up and one partner defaults on the loan, both the partners' credit scores will suffer. Similarly, their home loan eligibility in the future will be impacted, which can make it difficult for either to take out loans in the future.


Additionally, the non-defaulting partner may have trouble refinancing the home loan if their credit score has been damaged by their ex-partner's actions. This is even more risky when there is a need for an urgent loan for education or some emergency.  

  • Limited share

A joint home loan is a housing loan taken by two or more individuals. The loan amount is shared between the joint borrowers and all are equally liable to pay EMIs towards the housing loan.


However, it is to be noted that in the event of the death of one of the co-applicants on a home loan, the responsibility for repaying the loan in full falls on the shoulders of the surviving spouse. If the loan is not repaid, the lender has the right to seize assets from the borrower in order to recover the outstanding debt.

  • Right of ownership

When a couple takes out a joint loan to buy a property, both parties are equally liable for the debt. This means that if they divorce their partner, both of them will still be responsible for repaying the loan. Also, when there is more than one owner, it may become different for the both co-owners to agree to sell the property. 

To conclude

When spouses take out a home loan together, they are both equally responsible for repaying the debt. However, if the couple gets divorced or separated, repayment of the loan can become a contentious issue.


If only the husband is the primary borrower and he stops making loan payments, the entire burden of repayment falls on the wife despite being only a co-applicant. Also, the lender has the right to seize the assets of a co-applicant in case of non-repayment. 


So, whether an individual is about to apply for a home loan or is worried about what would happen if things go wrong with their partner, it is essential that they keep the above-mentioned points in mind. Moreover, it is crucial to make use of a home loan eligibility calculator to see how much one can afford to repay on their own.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.