Refinancing a mortgage before, during and after divorce

Refinancing before divorce means replacing your existing mortgage with a new loan, often to:

• Secure a better rate before finances become unstable
• Consolidate debts
• Remove or add a spouse to the mortgage
• Access equity before negotiating a settlement
• Protect one spouse’s credit score
• Prepare for a future buyout

It is a pre-emptive financial strategy, not a legal requirement.

Because refinancing before a divorce can sometimes:

• Reduce conflict
• Clarify ownership
• Make property division smoother
• Protect assets

But it can also be dangerous if done without legal advice, because it may unintentionally:

• Lock you into obligations you later regret
• Create claims of dissipation of assets
• Be seen as an unfair financial manoeuvre

This is why early legal guidance is essential.

It depends on the jurisdiction.

In the US, Canada, Australia, and the UK:

Refinancing before divorce is relatively common, especially when:

• Both parties agree to refinance
• The couple wants to reduce monthly payments
• One spouse wants equity before formal separation
• The market interest rates are favorable

However:

• Some states (US/Canada/Australia) consider pre-divorce refinancing a transaction subject to marital property rules.
• In the UK, affordability checks can fail if the couple is separating and income stability is uncertain.
• Banks may not accept refinancing if the divorce is imminent and financial documents do not reflect future realities.

In France:

Refinancing before divorce is far less common and more complex because:

• French banks are conservative with lending
• Refinancing often requires both spouses’ signatures if they co-own
• Divorce and refinancing must align with the matrimonial regime (community vs separation of property)

In France, refinancing before divorce is often not recommended unless supervised by a family lawyer and a notaire, because it affects:

• Rights of reimbursement
• Equity distribution
• Valuation of the property

Common Law Countries (US/UK/Canada/Australia):

Generally, yes — IF:

• That spouse qualifies alone
• The other spouse consents (if they are currently on the mortgage or deed)
• There is no legal injunction on property transfers

However, refinancing alone before divorce can be dangerous if:

• It changes equity distribution
• It removes financial rights of the other spouse
• It happens without disclosure

Courts can reverse or penalise unfair refinancing.

France:

No — not if both spouses are currently owners.

In France, while the mortgage can be in one name only, ownership cannot be altered without:

• A notarial act
• Consent of both spouses
• Compliance with matrimonial regime

Thus, refinancing alone before divorce is nearly impossible unless:

• The property was always owned exclusively by one spouse under a separation of assets regime
• There is no joint debt
• The spouse fully qualifies financially

Financial risks:

• Locking in a high rate
• Losing negotiation leverage
• Increasing debt
• Damaging credit scores
• Creating claims of unfair financial advantage

Legal risks:

• Creating a perception of hiding or moving funds
• Violating disclosure laws
• Turning separate property into marital property (US/Canada/Australia)
• Complicating the divorce settlement
• Creating refund claims (France)
• Increasing exposure to community property claims (France)

Relationship risks:

• Triggering distrust
• Escalating conflict
• Encouraging litigation

Generally, yes.

After divorce:

• Ownership is defined
• Debt responsibility is defined
• Banks accept the divorce decree as proof
• Buyout agreements are already established
• Legal restraining orders are lifted

But refinancing after divorce can fail if:

• The spouse keeping the home cannot qualify alone
• Credit score drops after separation
• Support obligations reduce borrowing capacity
• Market rates increase

Common Law Countries:

Responsibility depends on:

• The divorce agreement
• Court orders
• If names remain on the mortgage
• If one spouse retains occupancy

Important note:
Being removed from the deed DOES NOT remove you from the mortgage in common law countries.

A spouse can remain financially liable even after giving up ownership.

France:

Responsibility depends on the matrimonial regime:

• Under “communauté” marital property, both remain liable until refinancing or sale
• Under “séparation de biens” marital property, each is liable proportionally
• Banks still require both signatures until liquidation is complete

Options in common law countries:

• Sell the house
• Use a co-signer
• Renegotiate spousal maintenance (in rare cases)
• Negotiate debt assumption
• Request a court order to force sale

Options in France:

• The notaire may declare a forced sale
• A spouse may petition the judge to liquidate assets
• Banks may accept restructuring but rarely refinancing

Yes — indirectly.

Refinancing can impact:

• Borrowing capacity
• Disposable income
• Debt-to-income ratio
• Tax deductions (US/Canada)
• Occupancy arrangements
• Ability to claim certain housing benefits

In some cases, judges in common-law countries may:

• Reduce support obligations if refinancing increases expenses
• Increase support if a spouse keeps significant equity

France:

• Support is calculated separately — refinancing does not affect “pension alimentaire” so child maintenance directly
• But housing stability is considered in custody decisions