Buying out a spouse: how the amount arises and where the financing fails.

How the buyout amount is calculated

The buyout amount is the sum the person taking over pays for the other side's co-ownership share. It follows from a single calculation: the outstanding loan balance is deducted from the market value of the property, and each side is entitled to its share of that net value. With an equal share that is one half. If the land register records a different ratio, such as sixty to forty, that ratio applies rather than an even split.

The mistake that comes up most often in separation talks is half the market value. It arises because the property is thought of as an asset and the loan as something separate. For the calculation the opposite is true: the house would be sold with the debt attached, so the value to be divided is the one after the debt. Demanding half the market value means demanding an amount the asset cannot deliver, which blocks the very solution the person is trying to reach.

Three points remain open after the formula, and they are the real source of conflict. First, the valuation date: values move, and for the equalisation claim the end of the matrimonial property regime is the relevant moment (section 1378 paragraph 3). For the buyout, the parties should state expressly which date the valuation refers to. Second, the valuation itself: an online estimate is not a basis, and the bank will use its own figure in any case. Third, the side items: instalments paid alone after the separation, documented modernisation work, and a compensation for use of the home, which may be claimed to the extent that this is equitable (section 1361b paragraph 3). Whether and at what level such items are offset is a question of family law and belongs with a specialist lawyer, not in a financing guide.

A co-ownership share and an equalisation claim are two different things

In almost every conversation about a buyout, two claims get mixed up that have nothing to do with one another in law or in finance. The first is ownership of the house: where title to a thing belongs to several persons in fractional shares, the rules on co-ownership apply (section 1008 of the German Civil Code). That share is recorded in the land register, it is a piece of land, and it can be sold and transferred. The second is the equalisation of accrued gains. Where the gain of one spouse exceeds that of the other, half of the surplus is due to the other spouse as an equalisation claim (section 1378 paragraph 1). A claim, not a plot of land.

For the financing, this distinction is the single most important point in this article. A bank finances the purchase of a co-ownership share because it receives security over the asset in return. A monetary claim arising from the equalisation of accrued gains is not a property acquisition for the bank but a financing purpose without collateral of its own. How the parties word their agreement therefore decides which kind of loan is available at all:

In practice this means that anyone who wants to take over and finance the property alone should frame the agreement as a transfer of the co-ownership share against a purchase price, rather than as a payment on an equalisation claim. Both can reach the same economic result, but only the first is a transaction a bank treats as property finance. An agreement on the equalisation of accrued gains made during proceedings directed at the dissolution of the marriage requires notarial recording in any case (section 1378 paragraph 3), so a notary appointment is due either way. How the wording has to look in a specific case is for the notary and a family lawyer to settle.

Why the new loan pushes the loan-to-value ratio upwards

This is the section missing from the calculators and guides on this topic, and it explains most refusals. The buyout is as a rule financed against the same property that already served as collateral. The new loan therefore consists of the old balance plus the buyout amount. The collateral behind it does not grow, because it is the same house. The loan-to-value ratio, meaning the relationship between the loan and the mortgage lending value, rises as a matter of arithmetic.

Put the formula together and a rule emerges that is easy to remember. The buyout amount is half of market value minus remaining debt. The new loan is the remaining debt plus that amount. Together this means: the new loan always equals half of market value plus remaining debt. That produces a series of figures we write down regularly in consultations. The columns show percentages of the market value, and the last column assumes a mortgage lending value of ninety per cent of the market value:

Two insights sit in that table. The first: this loan never falls below around fifty per cent of the market value, not even for a fully repaid house. Measured against the mortgage lending value, a sole takeover therefore always starts above the band in which lenders grant their best terms. A buyout is not, however it feels, a minor administrative step at the edge of an existing loan. In financing terms it is a new purchase.

The second is the one that turns our conversations most often: the buyout amount and the loan-to-value ratio move in opposite directions. The further the house is repaid, the larger the amount the partner receives and the more relaxed the collateral position. The less is repaid, the smaller the amount and the harder the financing. So the difficult case is not the one with the large sum but the one with the small sum. That is the opposite of the impression a buyout calculator leaves, and it is why young loans are refused particularly often after a separation. An official figure fits alongside it: according to the Federal Statistical Office, around 130,100 marriages were dissolved in Germany in 2025, and the average duration of marriage at divorce was 14.6 years (Destatis, press release no. 220 of 26 June 2026). After not quite fifteen years a property loan is as a rule not yet repaid. The typical separation therefore hits the property in exactly the band of remaining debt where the table runs into the more expensive tiers.

A loan increase or full refinancing: the decision with the largest cost consequences

There are two routes to financing the buyout, and they differ markedly in cost. On the first, the existing loan stays untouched and an additional loan covers the buyout amount. On the second, the existing loan is redeemed and everything is combined into a new facility. Which is cheaper depends on two items: the terms of the old loan, and whether an early repayment penalty arises.

That is usually the argument for the loan increase. An early repayment penalty only arises when a loan is repaid before the end of its fixed-interest period. If it continues unchanged, none is due. There is a further point that is often missed: the registered land charge does not shrink along with the loan balance. It usually still stands in the land register at the amount of the original loan, and the part freed up by repayment can frequently be reused for a further loan with the same lender without any new entry in the land register. The options are set out in our article on cancelling or keeping a land charge. If the freed-up part does not cover the whole buyout amount, notary and land register costs for the increase follow.

A common misunderstanding belongs in the same place. Buying the other half of the share does not buy away half of the encumbrance. The land charge attaches to the land and not to a person, and the rules on mortgages apply to it accordingly (section 1192 paragraph 1). Where land is liable for the whole claim, the creditor may seek satisfaction from it in whole or in part at its discretion (section 1132 paragraph 1). The collateral therefore stays undivided even though the change of owner covers only one half.

Both routes require the departing partner to be released from liability for the loan. That is a separate step, it needs the bank's consent, and there is no right to it. How it works, how it fits around the notary appointment and what remains after a refusal is set out in our article on release from joint liability. The order is the same here: calculate first, then obtain the bank's written consent, then the notary.

What the bank checks besides the collateral

The loan-to-value ratio is only the first of two hurdles. The second is income, and it is assessed independently of the first. A sole takeover has to clear both: the collateral must carry the larger loan, and a single income must carry an instalment that two incomes carried before. Around thirty-five per cent of net income has established itself as the upper limit, which is a convention rather than a statutory rule. The arithmetic behind it is set out in our article on how much house you can afford.

Which share of the former joint income the person taking over must have earned for that limit to hold is worked through in our article on release from joint liability. The addition that matters for a buyout is not yet in that piece: the instalment does not stay the same in a buyout. It rises, because the loan rises. Both tests therefore tighten at the same time, which is exactly why it pays to run the calculation before the first figure is named in the negotiation rather than after it.

Which costs arise on the transfer

Beyond the buyout amount, the transaction itself costs money. The notary is not needed because of the bank but because of the ownership: a contract by which one party undertakes to transfer or acquire title to land requires notarial recording (section 311b paragraph 1). How notary and land register fees are measured is set out in our article on notary costs. What counts here is the value of the share transferred, not the value of the whole house.

The largest single item is the one that does not arise for married couples. Exempt from taxation are the acquisition of land by the spouse or civil partner of the transferor and the acquisition by the former spouse of the transferor in the division of assets after the divorce (section 3 numbers 4 and 5 of the Real Estate Transfer Tax Act, with number 5a for dissolved civil partnerships). The transfer between spouses is therefore free of real estate transfer tax, both before and after the divorce. The reverse is expensive for unmarried couples: none of these exemptions applies to them, so real estate transfer tax falls due on the share transferred. That is an amount in the order of several per cent of the value of the share, and it belongs in the calculation before any figure is put on the table.

A second tax point is regularly overlooked in separations. Transferring a co-ownership share for money is a disposal. If the property was acquired less than ten years ago and no exemption for an owner-occupied property applies, speculation tax can arise. It affects the side that transfers, and that is precisely the side whose owner-occupation ends with the move out. Whether the case arises in detail is for a tax adviser to assess. That it can arise should be known before anyone signs.

What remains if the buyout cannot be financed

If the calculation does not work, that is not a negotiating problem but a result. It then helps to know early which routes the law and the market keep open. First the statutory frame: each co-owner may demand the dissolution of the community at any time, and an agreement excluding that right is void (section 749 paragraphs 1 and 3). Nobody can be held in joint ownership indefinitely.

That also answers the question about physical division. Division in kind requires that the asset can be split into equivalent parts corresponding to the shares without any reduction in value (section 752). For a single-family house that is practically impossible; for a large plot or a house with two self-contained flats it can be considered. Where division in kind is excluded, dissolution takes place for land by way of compulsory auction and division of the proceeds (section 753 paragraph 1). That is the partition auction, and it is the worst of the possible outcomes, because it costs time, creates expense and rarely optimises the proceeds. It is therefore above all an argument for taking the other routes seriously. For the same reason, selling the share to a third party usually does not solve the problem: an outside co-owner buys into exactly this constellation and can in turn demand dissolution at any time.

Before that point there are five levers, in this order:

• Reduce the buyout amount: Equity, a loan from the family or offsetting documented side items shrink the part that has to be financed. This works twice over, because it also lowers the loan-to-value ratio.
• Reduce the instalment: A lower initial repayment rate or a longer fixed-interest period changes the household calculation, not the collateral position. This helps when income is the bottleneck.
• Spread the buyout: A part payment now and the remainder later is possible if both sides agree it and the claim is secured. That is a question for the notary and a family lawyer, not for the bank alone.
• Approach another lender: Lending limits and household allowances are set by the individual institution, not by statute. A refusal is therefore not a market verdict.
• Hold the community for a defined period: Joint ownership for a set time, for instance until the children finish school, is a deliberate decision rather than a failure. It needs a written arrangement and keeps joint liability alive.

If none of them produces a workable calculation, what remains is selling the property and dividing the proceeds after the loan has been redeemed. In many separations that is the cleanest solution, because it releases both sides from liability and from ownership at the same time. Why a refusal from one bank need not be the end of the financing is set out in our article on a declined application.

What to take away from this article

• The buyout amount follows from two figures: market value minus remaining debt, then the share from the land register. Half the market value is the most common mistake.
• A co-ownership share (section 1008) and the equalisation of accrued gains (section 1378 paragraph 1) are two different claims. Only the purchase of the share is a property acquisition with collateral of its own in the eyes of a bank.
• The new loan always equals half of market value plus remaining debt and therefore never falls below around fifty per cent of the market value. The loan-to-value ratio rises as a matter of arithmetic.
• The buyout amount and the loan-to-value ratio move in opposite directions. The difficult case is the barely repaid house with the small buyout, not the repaid one with the large buyout.
• If the old loan stays in place and only a top-up is added, no early repayment penalty arises, and the part of the land charge freed up by repayment is often reusable. The land charge attaches to the land, not to a person (sections 1132 paragraph 1 and 1192 paragraph 1).
• Between spouses and former spouses the transfer is free of real estate transfer tax (section 3 numbers 4 and 5 of the Real Estate Transfer Tax Act), for unmarried couples it is not. Notary and land register always cost money (section 311b paragraph 1), and the ten-year holding period for speculation tax can apply.
• If the calculation does not work, each co-owner may demand dissolution of the community at any time (section 749 paragraph 1). For a house that points towards a partition auction (sections 752 and 753 paragraph 1), which nobody is aiming for.

ME Finance is not a bank. We compare offers from more than 500 banks and credit institutions and work through a buyout with you before you commit to a figure: the loan-to-value ratio, the household calculation and the question of whether a loan increase beats full refinancing. How we work is set out on our property finance page. We take your key details through the no-obligation enquiry.