When a relationship ends, joint financial responsibilities, such as a home loan, do not automatically disappear. It is possible to remove one of the borrowers from a home loan agreement through a procedure called exoneration.
This process allows one person to be released from the loan and, consequently, the debt. However, the final decision rests with the bank, which will assess whether the remaining borrower has the financial capacity to solely manage the loan payments.
Exoneration is common in cases of divorce, separation, or dissolution of a de facto union, when one partner wishes to keep the property and assume the loan. It can also occur when one co-owner buys out another's share of a property, or in inheritance situations, provided the bank approves the contractual change.
