A divorce agreement can decide who stays with the house, but it does not alone obligate the bank to remove the other borrower from the mortgage. Property and debt are two distinct issues: if both signed the loan, they will continue to be liable to the entity until it formally accepts a modification.
The problem often arises when one of the two is awarded the house and commits in the separation agreement to pay all the installments.
Among the members of the couple, that pact can produce effects. In front of the bank, however, the mortgage contract remains the one originally signed.
Staying with the house does not mean staying only with the mortgage
The property can be awarded to one person through the liquidation of the matrimonial economic regime, an extinction of condominium, or another legally valid operation.
But that does not automatically imply that the other person disappears as a debtor.
If both are listed as borrowers, the entity retains the guarantees it accepted when granting the credit.
To remove a borrower, the bank is needed
The operation can be carried out through a novation that modifies the personal guarantees of the loan.
The Bank of Spain reminds that the entity is not obliged to accept that change, because removing a borrower reduces the guarantees of collection initially analyzed.
The bank can reassess the income, employment, and indebtedness of the person who wants to stay solely with the mortgage.
It can also request new guarantees, another co-borrower, or a guarantor.
What happens if the bank says no
If it does not accept the novation, both borrowers remain linked to the loan.
This means that, although a judgment or agreement establishes that one will pay the installments, a default can also affect the other borrower in front of the entity.
For the bank, the obligation derived from the original mortgage contract still exists.
The alternative of changing banks
The couple can try to have another entity finance the operation.
Depending on the case, a new mortgage or a modification combined with other operations on the property can be studied.
But any solution requires that the bank that ultimately assumes the loan considers the borrower who remains solvent.
There may be costs
A novation may incur a fee if it was contractually foreseen.
The entity can also request a new appraisal to analyze the current risk of the operation. The change must be formalized through a public deed.