For many divorcing couples in Maryland, one of the most significant financial concerns is what happens to the family home. Beyond its emotional value, the home often represents the largest shared asset—and deciding who keeps it (and how) can be one of the toughest parts of a divorce settlement.
Traditionally, if one spouse wanted to stay in the home, they had to refinance the mortgage to remove the other spouse’s name. But with interest rates much higher today than just a few years ago, refinancing often means trading a low 3% or 4% mortgage for one at 6% or more—a change that can add hundreds or even thousands of dollars to monthly payments.
That financial pressure has forced many couples to sell their homes, even when one spouse could otherwise afford to stay.
Starting October 1, 2025, a new Maryland law aims to change that. The law will require lenders to allow one spouse, after a final divorce decree, to assume the existing conventional mortgage—if they qualify based on income, credit, and lender standards. This change could help thousands of divorcing Maryland families keep their homes and preserve their lower interest rates.
Why This Law Matters
During the years of historically low interest rates, many families secured mortgages with rates under 4%. Refinancing at today’s higher rates can have a major impact on affordability and long-term financial stability.
Under the current system, a spouse who wanted to remain in the marital home typically had only two options:
- Refinance the mortgage into their own name at the current market rate, resulting in much higher payments.
- Sell the home and divide the proceeds, often leading to significant disruption—especially for families with children.
The new law introduces a third path. If one spouse can qualify on their own, they can assume the existing loan, keeping the original lower rate intact.
This could provide much-needed financial relief and flexibility for divorcing spouses trying to reach fair and practical settlements.
Key Benefits for Divorcing Families
This law could have a positive impact on many aspects of the divorce process, including:
- Lower Monthly Payments: Retaining the original mortgage rate can significantly reduce financial strain and make homeownership more sustainable after divorce.
- Simplified Negotiations: Settlement talks may become more straightforward when both spouses know that selling or refinancing isn’t the only option.
- Stability for Children: When one parent can keep the family home, children can remain in familiar schools and neighborhoods—minimizing disruption during a difficult time.
- More Flexible Settlements: By freeing one spouse from the need to refinance, assets and support arrangements can be structured in more creative, balanced ways.
Legal and Practical Considerations
While this new Maryland law opens the door to more equitable outcomes, it doesn’t eliminate all challenges. Spouses and their attorneys will still need to carefully navigate several important details, including:
- Qualification Requirements: The assuming spouse must independently qualify for the existing mortgage based on income, credit history, and lender criteria.
- Release of Liability: The departing spouse must be formally released from responsibility for the mortgage debt once the other assumes it.
- Title Transfer: Proper documentation must be completed to ensure the home’s ownership and mortgage responsibilities are aligned.
It’s also important to remember that not all loan types may be eligible for assumption. The law specifically applies to conventional mortgages, and some lenders may have their own additional conditions.
How Billian Law Helps Clients Navigate Mortgage Issues During Divorce
At Billian Law, we understand that your home is more than just a piece of property—it’s a cornerstone of your family’s financial and emotional stability. We take a comprehensive approach to divorce planning, helping clients understand the short- and long-term implications of every decision involving the marital home.
Our goal is to help clients make informed, strategic decisions that set them up for success long after the divorce is finalized.
Looking Ahead
With this new Maryland law taking effect in October 2025, now is the time for individuals and families to begin planning. If you’re considering divorce—or already in the process—it’s important to understand how this change could impact your housing and financial future. Not every couple will qualify, but for many, this new law could make the difference between having to sell their home and being able to stay where they are.
At Billian Law, our experienced family law attorneys are here to guide you through every aspect of your divorce, from property division to complex financial matters. We combine compassionate legal counsel with practical financial insight to help you achieve a fair and lasting resolution. Call (410) 889-5500 or contact us online today to schedule a consultation and learn how this new law could affect your divorce and your home.