How the Recent Reduction in the Base Rate Can Help You Afford to Separate or Divorce

The Bank of England’s recent decision to reduce interest rates to 4% – the lowest level in two years – could be the green light many separating couples have been waiting for.

For both married and unmarried couples, high mortgage rates have made separation financially out of reach. Now, with cheaper borrowing and improved mortgage capacity, more people may finally be able to move forward.

Why Interest Rates Matter in Separation

Whether you’re married or cohabiting, one of the biggest challenges when separating is deciding who lives where and how to divide the value of the home.

With mortgage rates at their highest in years, many couples have been stuck:

·       Unable to afford two separate homes

·       Delaying settlements or financial agreements until borrowing became realistic

·       Living under the same roof despite separation, creating stress for both adults and children

For some, this has meant staying in unhappy or even unsafe relationships much longer than they wanted.

A Turning Point for Separating Couples

With the base rate now cut from 4.25% to 4%, mortgage lenders are expected to follow suit. This creates new opportunities for separating partners:

·       Easier remortgaging for those needing extra cash flow

·       Improved borrowing capacity to secure a suitable new home

·       More realistic settlements or property agreements, as housing needs can now be met

Family lawyers predict more enquiries from both married and unmarried couples as people gain confidence that they can afford to move on.

The Legal Difference Between Married and Unmarried Couples

While the financial challenges are similar, the legal frameworks differ:

·       Married couples: Divorce settlements are based on sharing the “matrimonial pot” (including the family home, pensions, and other assets), ensuring housing needs for children and both spouses are met.

·       Unmarried couples: There is no automatic right to a financial claim against each other. Instead, disputes over property fall under property and trust law (TOLATA claims). In practice, this often means proving what shares each person is entitled to.

Why This Could Help You

If you’ve been delaying a separation because of financial uncertainty, the recent fall in rates could be the breakthrough moment. Resolving matters sooner rather than later may:

·       Reduce emotional strain on you and your children

·       Prevent drawn-out negotiations or disputes

·       Give you a clear financial path forward with greater security

Speak to a Specialist Family or Specialist Property Dispute Lawyer Today

At Parachute Law, we help both married and unmarried couples find practical, fair solutions when they separate. Our family and proeprty law teams can guide you through:

·       Divorce settlements and Financial Orders

·       Property and cohabitation disputes (TOLATA) and Settlement Agreeements

·       Negotiating fair outcomes while protecting your housing needs

Condtact our team today and book a free initial consultation and take the first step towards your fresh start.

Contact Parachute Law Today

Call us on: 0207 183 4547

Email us at thelegalteam@parachutelaw.co.uk

For more information on divorce and financial settlements click on the links below:

Who Gets What in a Divorce?
Why More UK Couples Are Too Broke to Divorce – A Cost of Living Crisis

Supreme Court Clarifies Asset Division in Divorce – Standish v Standish (July 2025)
Getting the Family Court to Make My Spouse Help Fund My Divorce Legal Fees: Legal Services Payment Orders (LSPOs