The four options

Sell and divide the proceeds

The cleanest break. You sell, pay off the mortgage and the costs of sale, and divide what is left according to your agreement. It severs the financial tie completely, which is worth a great deal. The downside is disruption, particularly if children would have to change schools, and the risk that neither of you can buy something comparable afterwards.

One person buys the other out

One of you keeps the house and pays the other for their share, often by refinancing. The critical question is whether that person can actually qualify for a mortgage on their income alone. It is worth finding out early, because a buyout that cannot be financed is not an option, however much both of you like the idea.

Deferred sale

You agree to sell later, commonly when the youngest child finishes high school, with one parent living there until then. It protects stability for children but keeps you financially entangled for years. If you take this route, the agreement needs to be precise about who pays the mortgage, taxes, insurance and repairs, how improvements are treated, and exactly what triggers the sale.

Continue to co-own

Sometimes used when selling now would crystallise a loss, or as a rental arrangement. It requires an unusual degree of ongoing cooperation and clear terms about costs, decisions and how either of you can exit.

The questions to answer before choosing

• What is the house realistically worth today, on a proper valuation rather than a guess?
• What is left on the mortgage, and what would it cost to refinance at current rates?
• Can either of you carry the housing costs alone, including taxes, insurance and maintenance?
• What would each of you pay to rent or buy somewhere else locally?
• If you defer, what happens if the person living there wants to remarry, move a partner in, or move away?

Do not trade the house against the retirement account without doing the maths

A common settlement is one person keeping the house and the other keeping a retirement account of similar face value. They are not equivalent. A house carries running costs, transaction costs on sale, and a tax position of its own; a retirement account may be taxed on withdrawal and may be subject to penalties if accessed early. Comparing headline figures is how people end up with a settlement that looked fair and was not. See retirement accounts.