Start with the home value and loan payoff amounts
Subtract the mortgage and other secured borrowing from the current home value. A $500,000 home with $300,000 to repay leaves $200,000 before costs. An expressly chosen equal split would give the departing partner $100,000.
Use figures for the same date and include each loan once. For a transaction approaching completion, request current payoff amounts. If you have not agreed the property value, compare the approaches to valuing a house for a buyout.
A statement balance is not necessarily the amount needed to clear the loan. A payoff quote can include interest through the proposed repayment date, unpaid fees and any applicable early repayment charge. Check which deductions the quote already includes before adding costs elsewhere.
Choose a percentage or contribution method
Choose the method that expresses the proposal you are comparing, not whichever produces a preferred payout. The options below answer different questions.
The unequal down payment examples show the effect on identical figures. If the correct treatment is disputed, keep the alternatives open rather than presenting one as an entitlement.
All three methods use the same net equity. What changes is its allocation.
| Your proposed treatment | Calculator method | Check before using it |
|---|---|---|
| Divide all net equity using selected shares | Percentage split | The shares are explicit; the calculator does not infer them from the title. |
| Return specified amounts, then divide the remainder | Return contributions first | Agree the credits and remainder split. Available equity must cover all credits. |
| Use contribution amounts to set the ratio for all equity | Proportional contributions | The contribution history must represent the ratio you intend to use, not just one deposit. |
A credit is an amount selected for the scenario. It is not an additional asset or a verified repayment right.
Read the buyout payment separately from the new loan
Partner B’s share is the proposed buyout payment. The borrowing illustration assumes Partner A replaces the secured loans, funds any positive payout and adds the refinance costs entered, using their own cash to reduce the new loan.
Loan-to-value compares the illustrated loan with the property value. It is a borrowing measure, not the percentage of equity due to either partner. Adding your own cash reduces the borrowing requirement; it does not reduce the agreed payout.
Monthly payments cover principal and interest at the rate and term supplied. They exclude taxes, insurance and recurring fees, and are not a lender offer. The buyout versus selling comparison helps you check the alternative if retaining the home is too expensive.
Illustration: $500,000 home, $300,000 mortgage and an explicitly selected equal split. No other secured debt or equity deductions.
| Funding calculation | Amount |
|---|---|
| Existing mortgage to repay | $300,000 |
| Departing partner’s buyout payment | $100,000 |
| Illustrative finance costs added | $6,000 |
| Remaining partner’s own cash used | Subtract $20,000 |
| Illustrated replacement loan | $386,000 |
| Loan compared with the $500,000 home value | 77.2% |
The payout stays $100,000. The cash contribution changes how it is funded. These figures do not establish affordability or lender approval.
When the calculator cannot return your contributions
If the selected credits exceed available equity, the return-first method stops. It does not decide whose credit takes priority or create a debt for the missing amount. A percentage split can still illustrate a shortfall, as shown in the negative equity guide.
Save a home buyout draft for review
Choose “Use this scenario in my inventory” to carry the inputs through sign-in in the same browser tab. Review the figures, partner names and reference date before creating the inventory. The draft can be imported for 30 minutes.
The home, other secured borrowing and calculation assumptions are saved without approvals. The calculation remains a snapshot in the property details. It does not select the overall asset split or confirm a payment.
Buying out a partner when there is no mortgage
Enter zero for the mortgage and any other secured borrowing. With a $400,000 home, no deductions and an explicitly selected equal division, the departing share is $200,000. Owning the home outright does not mean the remaining partner has that amount in cash. They would still need funds for the payout and transaction costs.