How to calculate the cost of buying someone out of a house in Australia

The calculator assumes you borrow the full agreed payout. You can pay the estimated costs from savings or add them to the loan, but there's no field for cash you put towards the payout itself. If you're putting in cash, take it off the total loan yourself, as in step 3 above. The repayment shown will still be based on borrowing the full payout. Swap the example rate and costs for your own figures.

Say your Melbourne home is worth $880,000, the mortgage payout is $420,000 and you've agreed to split the equity equally. Here's how the payout and new loan would add up:

The remaining owner needs approval for the $650,000 loan, which includes the $230,000 payout. With $30,000 cash contributed and no financed costs, the new loan would be $620,000. A Victorian relationship-breakdown duty exemption may apply if its conditions are met; legal and registration costs remain.

For a Brisbane unit worth $590,000 with a $360,000 mortgage, the same agreed 50/50 equity split gives you these figures:

You'd need to afford a $475,000 mortgage, plus any costs you add to it. Your lawyer also needs to check whether the transfer qualifies for Queensland duty relief. Splitting the equity equally doesn't decide that.

• To get the equity, start with the property's current market value, then subtract what's still owed on the mortgage.
• A $500k home with a $300k mortgage has $200k in equity.

You need a realistic value you can both work from. An independent valuer considers recent sales, location, size, age and condition. Our property valuation guide explains the difference between a valuation and an appraisal.

A higher value can mean more equity and a larger payout. What you owe and the wider settlement still affect the final amount.

An $800,000 home with a $300,000 mortgage has $500,000 in equity. If you've agreed to divide that equity equally, the payout is $250,000.

If the mortgage is $500,000 instead, there's $300,000 in equity and the same agreed half share is $150,000. In either case, you still need to fund the mortgage that's already there as well as the payout.

Give the valuer records of major renovations. They may affect the value, but a $50,000 kitchen won't always add $50,000. Your lawyer can separately explain how contributions to renovations fit into the settlement.

Use recent sales and a current valuation. The figure you had in mind when you separated may be out of date by the time you're ready to transfer the home.

You can buy out your partner, sell the home or keep owning it together for a time. I'd put the repayments and living costs beside each option before deciding.

If you are also changing the ownership record, see our guide to adding a partner to the property title.

Staying can keep you and the children near school, friends and familiar routines. Check what the full new mortgage would leave you to live on, then compare the buyout costs with selling and moving. Keeping the home needs to work beyond settlement day.

Selling can release equity and end joint ownership once settlement and the mortgage discharge are complete. The money must still be divided according to your agreement or court order. Allow for selling costs and work out where you'll live next before relying on the proceeds.

Keeping the home jointly for a while can give you time, but you're still financially connected. Agree with your lawyer who pays the mortgage, rates and repairs, who lives there, and what happens if one person wants to sell or stops paying.

I'd want an end date or a clear trigger for reviewing the arrangement. Waiting doesn't guarantee a better sale price.

If you're still deciding whether to keep the home, start with our keep or sell after separation guide. Our separation and home loans guide brings the loan, joint debts and next steps together.

A property settlement can include the home, other assets, superannuation and debts. Your share of the overall settlement isn't necessarily the same percentage as your share of the house title. Agree the legal settlement before using a calculator result as the payout amount.

The final property split may not be equal, especially if one person contributed more or has greater future needs.

Ask your family lawyer how the law applies to the proposed payout and the wider property settlement.

The law asks whether a settlement is 'just and equitable' and looks at the wider circumstances. Your lawyer can advise on that whether or not you go to court.

The bank has a different job: deciding whether to approve the loan. Its approval doesn't tell you whether the settlement is fair.

Your lawyer will consider financial contributions such as:

• Paying the house deposit
• Making mortgage repayments
• Covering major renovations or upgrades
• Paying rates, utilities, or insurance

Financial contributions are one part of the assessment. Your lawyer also considers unpaid work, caring responsibilities and each person's future needs.

The Family Law Act also values unpaid efforts, such as:

• Maintaining the home (repairs, gardening, cleaning)
• Supporting your partner’s career or studies
• Acting as the primary homemaker

Even if you didn’t earn an income, your contributions to the household still count.

Time spent caring for children or managing the household also counts as a contribution. The effect of those roles on future earning potential is considered too.

Your lawyer also looks at what each of you will need after separating, including:

• Your age and health
• Your income and job security
• Whether you’ll be the primary carer of any children
• Any other financial obligations or dependants

Caring for children can affect current and future financial circumstances. Your lawyer assesses this alongside the other factors; it doesn't produce a fixed percentage for the house.

There's no automatic percentage based on the length of a relationship. A lawyer considers the whole financial history, contributions and current and future circumstances. The economic effect of family violence can also be relevant under the current law.

Start with your income, living costs, other debts and the cash you can contribute. We'll assess the full mortgage you'd need on your own, then compare its rate, term and features. The lender may order its own valuation even if you've already agreed on a value for the settlement.

If you need child support to make the loan work, check what evidence a lender may need. Have details of your joint cards and loans ready too, including any accounts being paid out or closed as part of the settlement.

Take the valuation, current mortgage payout and borrowing estimate into the settlement discussion. Your lawyer can help you work through the payout, other assets and timing.

If direct contact is safe and appropriate, keep the discussion focused on those figures. If it isn't, ask your lawyer about another way to negotiate. A mediator may help where appropriate; each person can get independent legal advice.

Have your lawyer record the agreed payout, conditions and date the money is needed. Keep copies of the signed documents.

Our consent orders and home loans guide explains how to coordinate the finance checks with your lawyer before relying on a settlement deadline.

Your conveyancer or property lawyer prepares the title-transfer documents and coordinates settlement with the lender. The payout, ownership change and new loan need to happen together.

The lender must approve the refinance or other change that releases the outgoing borrower. A title transfer or private agreement doesn't remove someone from the mortgage. Confirm the full loan amount, repayments and term before settlement. Afterwards, check that the ownership transfer and the lender's release are both complete.

A relationship-breakdown transfer may qualify for duty relief and CGT rollover, but these are separate checks. Have your solicitor and tax adviser confirm both before setting the settlement amount.

If the relationship-breakdown rollover conditions are met, the person transferring their share disregards the capital gain or loss on that eligible transfer. The transfer must be made under a qualifying court order, formal agreement or arbitration award. A private or informal arrangement doesn't qualify. Ask your tax adviser to check the actual documents and transfer.

The person receiving the share generally takes over its relevant cost base. The buyout price doesn't automatically become the new tax cost base.

Relationship-breakdown exemptions or nominal-duty rules can reduce transfer duty, depending on the state and the actual transfer. The people receiving the property, legal documents and connection to the settlement matter. A buyout between friends or siblings doesn't automatically receive relationship-breakdown relief.

If the property has been rented, used for a business or owned by a non-resident, ask for advice before assuming a main-residence exemption applies. Include any agreed tax adjustments in the wider settlement. The home equity figure is only one part of the agreement.

Before fixing the payout date, get a current mortgage payout and quotes for the work needed to transfer the home. A complicated settlement can cost more than a simple refinance. These are the costs I'd put in the budget:

• Valuation: check whether the lender covers its valuation and whether you need a separate report for the property settlement.
• Legal advice and settlement documents: ask what the quote includes and whether conveyancing, negotiations and consent-order work are separate. Avoid counting the same legal work twice.
• Loan costs: allow for application, settlement, discharge and any fixed-rate break costs. Ask for a payout valid for the intended settlement date.
• Duty and registration: confirm any exemption or nominal duty, plus current title and mortgage registration fees.
• LMI: a new loan above 80% LVR may attract a new premium unless an exception applies. Check LMI waivers if relevant; a previous premium doesn't automatically transfer.
• Cash buffer: keep an allowance for moving, repairs and bills after settlement.

Use our refinancing guide and extra repayment calculator to compare the loan alongside the payout. For lender features and fees, the Commonwealth Bank and NAB reviews are starting points; obtain a current quote for your application.

Keeping the home gives you any future rise in its value, but you also carry the risk of a fall and all the repair bills. A mortgage, court orders or other obligations can still affect what you do with the property, including a later sale.

Watch the new loan term. Starting again at 30 years can make the monthly repayment look easier while adding to the total interest. Compare the loan over your remaining term first.

There can be pressure to agree quickly just to get the conversation over with. I'd check the figures properly before you commit to a payout date you can't meet or a mortgage that's too tight.

Duty and registration rules depend on where the property is. Your conveyancer can tell you which exemption or reduced duty might apply and which documents you need. The links below go to each revenue office.

Before you promise a payout date, confirm the amount with your lawyer and find out what the lender will approve. Leave money for transfer costs and the bills after settlement. If the loan leaves too little to live on, revisit selling or temporary joint ownership before committing.