How to Buy Out Your Spouse From the Matrimonial Home
How the buyout process works, what lenders require, and how refinancing is typically structured.
What a spousal buyout is
A spousal buyout is when one partner keeps the family home and pays the other partner their share of the equity. In most cases, this is completed by refinancing the mortgage into the name of the partner keeping the home.
How it works
The new mortgage is structured to:
- Pay off the existing mortgage
- Pay the departing spouse their buyout amount
- Optionally consolidate debts related to the separation
Once completed, the departing spouse is removed from the mortgage and (where applicable) title is updated based on the agreement.
Example
- Home value: $1,200,000
- Current mortgage: $600,000
- Equity: $600,000
If equity is split 50/50, the departing spouse’s share is $300,000. The refinance would typically pay off the $600,000 mortgage and fund the $300,000 buyout (new mortgage: $900,000).
What lenders usually require
- A signed separation agreement or court order confirming the buyout terms
- Income qualification for the spouse keeping the home
- Confirmation of the existing mortgage details and property value
- A clear plan to remove the other spouse from title where required
When traditional lending may not fit
If timelines are tight or documentation is still being finalized, there may be interim strategies using private / alternative lending with a clear exit plan back to a traditional mortgage.
What to expect
- Review the mortgage, property value, and equity.
- Confirm the separation agreement terms and buyout amount.
- Choose a lender strategy (traditional, alternative, or private).
- Approve and fund the refinance.
- Complete title / mortgage changes per the agreement.
Related reading: Spousal Buyout Mortgages and The Complete Guide to Divorce Financing in BC.