Divorce, Separation and your mortgage options.

If you're navigating the rocky waters of separation or divorce, you might be wondering what happens to that lovely mortgage you once took out together. In BC, Canada, there are a few different ways to handle your mortgage after a split.

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Divorce: the gift that keeps on giving—emotional turmoil, financial strain, and a joint mortgage! While your old love fades into a bittersweet memory, certain responsibilities stubbornly remain, like that mortgage you both signed up for.

 

A Separation Agreement is your new best friend, sorting out child support, spousal support, and the division of debts and assets.

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Now, let's talk about that mortgage, shall we? Because nothing says "moving on" quite like figuring out what to do with your biggest shared asset or how to qualify on your own.

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1. Sell the Home

Ah, selling the house—a popular choice for those who'd rather not bump into each other in the hallway. Of course, you’ll need to settle the mortgage, pay off sale-related costs, and deal with pesky things like real estate agent commissions and legal fees. But hey, if you’ve got the cash, why not cut ties and split the leftover money? BC’s got rules to make this process as smooth as possible.

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2. Stay In and Buy the Other Out

One of you still loves the house?

Great! Just buy out your ex’s share.

This involves a 'release of covenant' to free the departing spouse from mortgage duties. The one staying put gets reassessed to see if they can handle the mortgage solo. We have a spousal buyout program where you can buy out 95% of the value and give it to your partner. 

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3. Stay In and Refinance

Can’t afford to buy out your ex but have enough equity?

Consider refinancing!

This lets you stay in the house without needing a vault of gold coins. Remember, you'll need a good credit score and enough income to make this work. And your ex needs to be cool with selling their share of the equity. Because nothing says "amicable split" like a mortgage refinance.

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4. Keep Paying the Mortgage Together

This option is for those who really, really love their house—or just can’t afford any other choice.

Continuing to co-own the home post-divorce can be tricky.

You’re relying on each other to make the payments, which can be a gamble if the relationship is, shall we say, less than friendly. Missed payments from your ex? They’re your problem now.

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