When a marriage or common-law relationship ends, the mortgage outlasts it: the lender isn’t bound by your separation agreement, and everyone on the mortgage stays liable until it is refinanced or the home is sold. This guide covers the mortgage side of a separation: keeping the home and buying out your former partner, the limits on refinancing, how lenders treat support payments, and qualifying to buy again on one income. The tax side (the spousal rollover, the principal residence exemption and rental property) is covered in tax on dividing property in a divorce. It is one of our guides to buying outside the standard bank route.
The usual outcomes for the home
| Outcome | What happens to the mortgage |
|---|---|
| One person keeps the home | They refinance in their name only and pay the other their share of the equity |
| The home is sold | The mortgage is paid off from the proceeds, and the remaining equity is divided under the agreement or court order |
| A deferred sale | The home is kept for a time, often for the children’s stability, and sold later; both stay on the mortgage until then |
| One or both buy again | Each qualifies on their own income, often using their share of the equity as the down payment |
| No agreement and no refinance | A court can order a sale; both remain liable for the payments in the meantime |
How family property is divided, and the different rights of married and common-law couples, is set by provincial family law; the couples’ side of that is in joint mortgages for spouses and partners.
Keeping the home: the buyout
- Get an appraisal. An independent appraisal sets the current market value both sides rely on.
- Work out the equity. Market value minus the remaining mortgage balance.
- Set each share. The separation agreement or court order says what each person gets; for married spouses it is often half.
- Refinance in one name. The new mortgage pays off the old one and usually includes the buyout amount.
- Pay the buyout. The departing partner receives their share from the refinance proceeds.
- Change the title. The departing partner comes off the title. Whether land transfer tax applies to a transfer between spouses depends on the province.
| Item | Amount |
|---|---|
| Appraised value | $800,000 |
| Remaining mortgage | $400,000 |
| Equity | $400,000 |
| Departing partner’s share (50%) | $200,000 |
| New mortgage needed | $600,000 |
| As a share of the home’s value | 75% |
The person keeping the home has to qualify for the whole new mortgage on their own income, including the mortgage stress test. That, more than the equity, is usually what decides whether a buyout is possible.
How much a refinance can raise
Under the Bank Act, a bank's loan to buy, renovate or improve a home, or a refinance of such a loan, together with any mortgage ranking equal to or ahead of it, can't exceed 80% of the home's value. Mortgage insurance can't lift an ordinary refinance above that limit: under the federal mortgage insurance rules, an insured high-ratio loan has to be for buying the home or for paying off an earlier uninsured low-ratio loan. If the most a lender can advance isn’t enough to pay off the existing mortgage and the buyout, the options are:
- a smaller buyout, negotiated in the agreement, perhaps offset by other property;
- a second mortgage or a loan from another lender for the difference, usually at a higher rate;
- selling the home instead.
If one person is simply taking the other off an existing mortgage with no new money, the lender still has to approve the change; adding or removing someone on a mortgage covers that process.
How lenders treat income and support
| Income or payment | How lenders usually treat it |
|---|---|
| Your employment income | Counted as before |
| Spousal support you receive | Often counted as income when it is set out in a separation agreement or court order and you can show a record of receiving it |
| Child support you receive | Some lenders count it and others don’t; policies vary widely |
| A lump-sum settlement | Not income, but it can be used as a down payment or to reduce the mortgage |
| Spousal support you pay | Deducted from your income or added as a monthly debt |
| Child support you pay | Added as a monthly debt, which raises your total debt service ratio |
Paying support reduces the mortgage you can qualify for in the same way a car loan of the same monthly payment would.
What lenders ask for
| Document | Why |
|---|---|
| Signed separation agreement | Shows how property, debts and support are divided |
| Divorce order, if there is one | Confirms the divorce and any court-ordered terms |
| Appraisal | Sets the value for the refinance and the buyout |
| Proof of income | Employment letter, pay stubs, T4s and notices of assessment |
| Proof of support received | The agreement or order plus bank statements showing the deposits |
| Down payment or equity | Statements for a new purchase, or the equity figure for a refinance |
Buying a home again
Down payment sources
| Source | Notes |
|---|---|
| Your share of the equity | Proceeds from a sale or a buyout |
| Savings | Money set aside during the separation |
| Home Buyers’ Plan | Up to $60,000 from your RRSPs; the relationship breakdown exception can let a separated person use it again even after owning a home recently |
| FHSA | Only if you meet the FHSA’s own first-time buyer test, which has no separate breakdown exception |
| A gift from family | Lenders ask for a signed gift letter |
| Other savings | TFSA savings, or RRSP withdrawals outside the HBP, which are taxable |
Budgeting on one income
| Cost | Before, shared | After, on one income |
|---|---|---|
| Mortgage or rent | Split between two | All yours |
| Property tax and insurance | Split | All yours |
| Utilities | Split | All yours, though usage may fall |
| Transportation | Often shared | You may need your own vehicle |
The mortgage affordability calculator shows what a single income supports at current rates; buying alone is covered in more detail in buying a home as a single person.
Common mistakes
| Mistake | Why it matters |
|---|---|
| Keeping a home one income can’t carry | A home that worked on two incomes may not be affordable, or financeable, on one |
| Skipping the appraisal | An independent value protects both sides in the buyout |
| Changing the mortgage before the agreement is signed | The agreement is what sets each person’s rights |
| Co-signing a former partner’s new mortgage | You stay liable for their debt; see co-signing or guaranteeing a mortgage |
| Letting payments lapse during the dispute | Missed payments damage both credit files while both names are on the mortgage |
| Forgetting the beneficiaries | Life insurance, mortgage insurance and registered-account beneficiaries may still name the former partner |
The bottom line
A separation agreement decides who gets the home, but only a refinance or a sale takes a name off the mortgage. The person keeping the home has to qualify alone, within the refinance limits; the person leaving can usually buy again with their share of the equity, and may be able to use the Home Buyers’ Plan again. Splitting RRSPs, pensions and other savings is covered in RRSPs and pensions in a divorce.
Sources
The figures and rules on this page come from these sources, last checked against them between August 29, 2026 and September 29, 2026. How we check facts.
- Canada Revenue Agency: RRSP: The Home Buyers' Plan
- CMHC: CMHC Refinance for Building Secondary Suites
- Financial Consumer Agency of Canada: Home equity lines of credit
- Justice Laws (Canada): Bank Act
- Justice Laws (Canada): Eligible Mortgage Loan Regulations
- OSFI: Residential mortgage underwriting practices and procedures