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Cost of living causing separation has become a financial trap for thousands of Australians – not just ending relationships, but preventing couples from physically parting ways.
Separation Report 2026 found that housing and cost pressures are keeping ex-partners under the same roof long after the relationship has ended, with many unable to fund a separate life on a single income.
Money.com.au research into homeownership and relationship breakdown found that more than a quarter of Australians have dissolved a marriage or partnership while holding property jointly with their former partner. Of that group, fewer than half walked away with the family home intact – one person keeping the property was the outcome in just over half of cases.
Nick Burgess, mortgage expert at Money.com.au, said the financial shock hits fast. ‘A separation reduces a household’s financial capacity. Going from two incomes supporting a mortgage on the family home to a single income can quickly create a financial shock that sets people back years,’ he said.
‘Many people either don’t have enough borrowing power to buy out their former partner, or they can’t service the mortgage repayments on the family home on their own.’
| What happened to the family home | Share of separated homeowners |
|---|---|
| One person kept the property | 51% |
| Forced to sell – neither could afford to hold or buy out | 31% |
| Sold for other reasons (downsizing, relocation) | 16% |
| Kept as investment property | 2% |
Forced sales were the outcome for nearly a third of joint homeowners – 31% – with neither party able to hold the property or fund a buyout, Money.com.au data shows. A further 16% sold for reasons unrelated to affordability, such as downsizing or relocation.
For many, offloading the property doesn’t close the financial gap. Burgess said both parties then face the challenge of re-entering a market that penalises single buyers.
‘They’re forced to sell and split the equity, which often leaves both parties with smaller deposits for their next purchase,’ he said. ‘Many solo buyers don’t meet bank serviceability requirements at today’s property prices.’
Of the separated homeowners surveyed, three in ten eventually bought again alongside a new partner. A further 12% had not returned to the property market at all by the time of the survey.
For brokers already navigating single-income mortgage serviceability challenges, these clients represent a growing and underserved segment.
Financial pressure isn’t only trapping people in shared homes after a split; it’s preventing many from separating in the first place. The Real Insurance Separation Report 2026 found two in five respondents had pushed back the decision to leave because they couldn’t afford to go.
The delay fell hardest on women, with 46% citing money as the reason they stayed. Among younger cohorts the figure was steeper still – 77% of Gen Z respondents and 61% of Gen Y said the same.
Financial dependence compounded the problem. Four in ten respondents said they had relied on their partner financially before the split. Among women, that figure was 54%, against 27% of men.
The legal process added its own costs. Respondents who engaged lawyers paid an average of $7,481 in fees – a figure that rose for those who delayed getting advice early.
Hitch principal lawyer Elise Fordham said delay rarely reduces that cost. ‘Separation is one of the most financially complex events a person will face, and the decisions made in those early weeks can have consequences that last decades,’ she said. ‘People stay in limbo … often because they’re afraid of what the legal process will cost or reveal. But delay rarely protects you financially – more often it compounds the problem.’
Fordham said women who stepped back from careers during the relationship faced a particularly steep financial fall upon separating. ‘Overnight, they can lose access to income, joint accounts, and the family home – often with no independent financial footing to fall back on,’ she said.
With cost of living causing marital breakdowns across the country, brokers will encounter more clients who are mid-split and financially stranded. These clients typically face three compounding pressures at once: reduced borrowing capacity, depleted equity, and a rental market that offers little relief.
The Australia housing affordability crisis makes the market these clients are re-entering especially unforgiving. Single applicants face the same prices as dual-income buyers, but with half the borrowing power.
Brokers advising separated clients should model single-income scenarios early and flag serviceability gaps before a client commits to any property decision. Understanding what obligations remain on a shared mortgage after separation is increasingly a core part of those conversations.
Burgess noted that 58% of separated homeowners eventually bought again independently. But the timeline was longer than most expected, and the path was rarely direct.
