Spousal Buyout Mortgages in Kelowna

Separation and divorce are never easy—emotionally, financially, or practically. When a family home is involved, the decisions can feel even heavier, especially when children are part of the picture.

For many separating couples, selling the home is the default outcome. But in some situations, one spouse may wish to remain in the home and buy out the other’s share of the equity. A Spousal Buyout Mortgage can make that possible, offering a way to move forward while preserving stability.

A spousal buyout mortgage allows one spouse to refinance the matrimonial home in order to purchase the other spouse’s share of the equity.

Under this program, eligible borrowers may refinance up to 95% of the home’s current market value. The funds are then used to:

• Pay out the departing spouse’s equity
• Remove the former spouse from the mortgage and title
• Establish sole ownership of the home moving forward

This type of mortgage is commonly used when one partner wants to keep the family home following separation or divorce.

While the requirements are straightforward, specific criteria must be met for approval. 

Generally, the following conditions apply:

• You must qualify for the mortgage based on your income alone
• The total mortgage amount cannot exceed 95% of the home’s appraised value
• A signed separation or divorce agreement must be in place
• A buyout agreement between both parties is required
• The mortgage amount cannot exceed what is required under the separation agreement
• Both individuals must currently be listed on the home’s title
• A professional appraisal of the property is required

These rules are designed to ensure the transaction reflects the legal division of assets.

The primary purpose of a spousal buyout mortgage is to allow one party to remain in the family home. In addition to paying out the former spouse’s equity, the mortgage may also be used to address joint debts, such as:

• Shared lines of credit
• Joint loans
• Other financial obligations outlined in the separation agreement

All debts paid through the mortgage must be explicitly included in the legal agreement and fall within the allowable loan amount.

In most refinancing scenarios, homeowners are limited to borrowing up to 80% of the home’s value. Spousal buyout mortgages are different.

Because they are tied to a legal separation or divorce, lenders may allow borrowing up to 95% loan-to-value, which is not typically available through:

• Home equity lines of credit (HELOCs)
• Standard refinances
• Second mortgages

This higher loan-to-value makes spousal buyouts possible in situations where selling the home would otherwise be the only option.

Divorce brings enough change on its own. For many families, remaining in the home—especially for the children—can provide stability during an otherwise uncertain time.

A spousal buyout mortgage isn’t the right solution for every situation, but when it fits, it can ease financial pressure and simplify an already challenging transition.

Spousal buyout mortgages involve legal agreements, lender guidelines, and careful financial structuring. Working with professionals who understand both the emotional and technical aspects of the process is essential.

If you’re navigating a separation or divorce and want to explore whether keeping the family home is an option, I can help you understand your choices and work alongside your legal team to ensure the mortgage is structured correctly.

Let’s discuss your situation and determine the best path forward for you and your family.