Understanding a Spousal Buyout Mortgage

Josh Perez • April 24, 2024

If you’re going through or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property and buy out your ex-spouse.


If you’re like most people, your property is your most significant asset and is where most of your equity is tied up. If this is the case, it’s possible to structure a new mortgage that allows you to purchase the property from your ex-spouse for up to 95% of the property’s value. Alternatively, if your ex-spouse wants to keep the property, they can buy you out using the same program.


It’s called the spousal buyout program. Here are some of the common questions people have about the program.


Is a finalized separation agreement required?


Yes. To qualify, you’ll need to provide the lender with a copy of the signed separation agreement, which clearly outlines asset allocation. 


Can the net proceeds be used for home renovations or pay off loans?


No. The net proceeds can only buy out the other owner’s share of equity and/or pay off joint debt as explicitly agreed upon in the finalized separation agreement.


What is the maximum amount that you can access through the program?


The maximum equity you can withdraw is the amount agreed upon in the separation agreement to buy out the other owner’s share of the property and/or retire joint debts (if any), not exceeding 95% loan to value.


What is the maximum permitted loan to value?


The maximum loan to value is the lesser of 95% or the remaining mortgage + the equity required to buy out other owner and/or pay off joint debt (which, in some cases, can total < 95% LTV. The property must be the primary owner-occupied residence.


Do all parties have to be on title?


Yes. All parties to the transaction have to be current registered owners on title. Your solicitor will be required to confirm this with a title search.


Do the parties have to be a married or common-law couple?


No. Not only will the spousal buyout program support married and common-law couples who are divorcing or separating, but it’s also designed for friends or siblings who need an exit from a mortgage. The lender can consider this on an exception basis with insurer approval. In this case, as there won’t be a separation agreement, a standard clause will need to be included in the purchase contract to outline the buyout.


Is a full appraisal required?


Yes. When considering this type of mortgage, a physical appraisal of the property is required as part of the necessary documents to finalize the transaction.


While this is a good start to answering some of the questions you might have about getting a mortgage to help you through a marital breakdown, it’s certainly not comprehensive. When you work with an independent mortgage professional, not only do you get a choice between lenders and considerably more mortgage options, but you get the unbiased mortgage advice to ensure you understand all your options and get the right mortgage for you.


Please connect anytime; it would be a pleasure to discuss your needs directly and provide you with options to help you secure the best mortgage financing available. Also, please be assured that all communication will be held in the strictest of confidence.

Josh Perez
GET STARTED
By Josh Perez April 30, 2025
Let’s say you have a home that you’ve outgrown; it’s time to make a move to something better suited to your needs and lifestyle. You have no desire to keep two properties, so selling your existing home and moving into something new (to you) is the best idea. Ideally, when planning out how that looks, most people want to take possession of the new house before moving out of the old one. Not only does this make moving your stuff more manageable, but it also allows you to make the new home a little more “you” by painting or completing some minor renovations before moving in. But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in. Bridge financing allows you to bridge the financial gap between the firm sale of your current home and the purchase of your new home. Bridge financing allows you to access some of the equity in your existing property and use it for the downpayment on the property you are buying. So now let’s also say that it’s a very competitive housing market where you’re looking to buy. Chances are you’ll want to make the best offer you can and include a significant deposit. If you don’t have immediate access to the cash in your bank account, but you do have equity in your home, a deposit loan allows you to make a very strong offer when negotiating the terms of purchasing your new home. Now, to secure bridge financing and/or a deposit loan, you must have a firm sale on your existing home. If you don’t have a firm sale on your home, you won’t get the bridge financing or deposit loan because there is no concrete way for a lender to calculate how much equity you have available. A firm sale is the key to securing bridge financing and a deposit loan. So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.
By Josh Perez April 30, 2025
If you’re crushing it with duplex conversions, Airbnb rentals, flips, or student housing, you might be wondering: Should I double down on what’s working—or start learning about other strategies to diversify my real estate portfolio? It’s a great question—and one I get asked all the time. My typical advice? Double down on your strengths, outsource your weaknesses. If you’ve found a strategy that fits your skills, market, and cash flow goals, it’s smart to build momentum. But in real estate—especially in today’s market—it’s just as important to stay informed and flexible. Why Staying Educated Matters Real estate isn’t static. The rules of the game are constantly changing. Lending practices shift. Local bylaws evolve. What worked flawlessly last year may become less profitable—or even unviable—this year. Here’s what I mean: “If lenders and banks don’t want to lend as much on certain assets—like student rentals or short-term rentals—or they start to clamp down on duplex conversions, that changes your rate of return. That changes the rules of the game.” If your entire strategy depends on leverage (and let’s face it, most real estate investing does), changes in financing can dramatically shift the effectiveness of your current approach. Keep Learning, Stay Adaptable Even if you’re succeeding now, always keep learning. New strategies like BRRRR, rent-to-own, mid-term furnished rentals, or commercial opportunities might offer different advantages in changing markets. You don’t need to master them all, but you do need to understand how they work—and when it might make sense to pivot. Final Thoughts Crushing one niche? Keep going. But don’t ignore the bigger picture. As markets evolve, being aware of shifting rules, lender policies, and local regulations will give you the edge.  At the end of the day, the best investors aren’t just good at one strategy—they’re nimble, informed, and proactive. If you want to chat about how to strengthen your current investments and position yourself for what’s next, let’s connect.