My daughter is in a joint mortgage with a friend she has now fallen out with and wants to sever the connection. The mortgage contract still has another two years to run. Is there any way she can end it early without incurring any expensive penalties?
The likelihood is that the two of them will have bought the house with a Fixed Rate or Tracker mortgage – with penalties for early repayment. Your daughter can only sever the connection by either transferring her interest to the former friend, or a third party who may want to become a joint owner. Or, the former friend could transfer her interest to your daughter, known as a Transfer of Equity.
No alteration to the current arrangements will be possible until the mortgage company has agreed to any transfer. If only one owner is to remain, the lender will need to be satisfied with the earning potential of that sole remaining owner – before releasing the outgoing party. If the house has to be sold then an early repayment penalty may be incurred. Most lenders will not charge an early repayment penalty on a Transfer of Equity, but check first as any penalties can be substantial.