Separating in BC? Your Options for the House (Keep It or Sell It)


Nobody plans for this part.

You're trying to keep things steady for the kids. You're lying awake doing math at 2 a.m. And somewhere in the middle of all of it, you have to decide what happens to the house.

The house is never just a house. It's the kids' bedrooms. The kitchen where every birthday happened. The thought of losing it on top of everything else can feel like too much.

The calls I get about separation usually start the same way. Quiet. Then: "I don't even know where to start."

So let's start here. These are your options, and what you need to know before you agree to anything.

Your two main options

When a couple separates, the house usually goes one of two ways:

  1. One of you keeps it and buys the other out.
  2. You sell it and split what's left.

Both can be the right choice. The wrong choice is the one you make before you know your numbers.

Option 1: Keeping the house

If you want to stay, you'll usually need to refinance the mortgage into your name alone. The new mortgage pays off the old one and pays your ex their share of the equity.

Here's the part that catches people off guard: whoever keeps the house has to qualify for that mortgage on their own. One income, plus your own debts. That's where a lot of plans fall apart.

But one income doesn't automatically mean no. Every situation is different, and you won't know what you qualify for until you ask. (In Part 2 of my video series, I explain how child support and spousal support can help you qualify.)

You may not need 20% equity

Most people assume that if they don't have a lot of equity, they have to sell. Not always.

A regular refinance usually lets you borrow up to 80% of your home's value. But there are spousal buyout programs, backed by Canada's mortgage insurers, that can let you borrow up to 95% of your home's value to buy out your ex's share. You still need to qualify on your own, but for a lot of families, this is the difference between staying and selling.

Most people never hear about this until it's too late.

Option 2: Selling the house

Sometimes selling is the cleanest fresh start. If you go this way, know what comes off the top before anything gets split:

  1. The remaining mortgage balance
  2. Any mortgage penalty for breaking your mortgage early
  3. Realtor fees
  4. Legal or notary fees

What's left is usually split based on your separation agreement or a court order.

What most people don't know

Moving out doesn't take your name off the mortgage

If you're both on the mortgage, you're both responsible for it until it's refinanced or the home is sold. Keep the payments going while you work things out. A missed payment can hurt both of your credit scores, even if you moved out months ago, and that can make it harder to qualify later.

It's not just the house that gets split

In BC, family property is generally divided equally between spouses, and so is family debt. That can include lines of credit and credit cards, not just the mortgage. Each spouse usually keeps their own excluded property, like things you brought into the relationship. A family lawyer can tell you exactly how this applies to you.

Your real equity is smaller than you think

The number on paper and the number in your pocket are rarely the same. Before you agree on what the house is worth to each of you, find out your mortgage penalty and the cost to sell. Penalties vary from lender to lender and can be thousands of dollars.

You'll need a signed separation agreement

This one surprises a lot of people. If one of you is keeping the house, most lenders will want to see a signed separation agreement (or a court order) before they'll do the buyout.

The agreement should spell out who keeps the house, how much is being paid to buy the other person out, and any joint debts being paid off. If a debt isn't named in the agreement, the lender usually can't include it.

The good news: you don't have to wait until everything is signed to start. You can talk to a mortgage broker and get pre-approved while the agreement is still being worked out. That way, the numbers in your agreement are numbers you can actually qualify for.

Expect to provide:

  1. Your signed separation agreement or court order
  2. Your income documents
  3. Your current mortgage statement
  4. An appraisal of the home


A penalty isn't always a given

Divorce isn't an exception in mortgage contracts. If you break your mortgage early, a penalty can apply. But it isn't always required, and this is worth knowing before anyone signs anything.

Depending on your lender and your situation, you might be able to:

  1. Time it with your renewal. If your mortgage is coming up for renewal soon, doing the buyout then can mean no penalty at all.
  2. Take over the existing mortgage. If no extra money is needed for the buyout, some lenders will let one spouse take over the mortgage as it is and release the other.
  3. Stay with your current lender. Some lenders will blend your current rate with a new one instead of charging a full penalty.
  4. Move your mortgage with you. If you're selling and buying again, you may be able to port your mortgage to the new home.

Not every option works for every lender. The point is to ask before you decide, because the date in your separation agreement can force you to break your mortgage at the worst possible time.

Hold off on new credit

Try not to open new credit cards, finance a car or take on new debt while you're separating. Anything new shows up when a lender reviews your application, and it can lower what you qualify for right when you need it most.

Questions to ask before you sign anything

  1. Can I qualify for the mortgage on my own?
  2. What does the lender need to see in our separation agreement?
  3. What's my penalty if we break the mortgage now, and is there a way to reduce or avoid it?
  4. What's our real equity after the penalty and selling costs?
  5. Are there programs that could help me keep the house?
  6. Who's paying the mortgage until this is settled?

The bottom line

You don't know what you don't know. The biggest mistake I see is people deciding what happens to the house before they know their options.

Talk to a mortgage broker before your separation agreement is final. What you qualify for can change what you agree to. And talk to a family lawyer about your rights. That part is their job.

If you're in Maple Ridge, Pitt Meadows or Langley and you're going through this, reach out. We'll look at your real numbers together, so you can make this decision with clear eyes, not fear.


This article is general information, not legal or personalized mortgage advice. Every situation is different. Talk to a family lawyer about your legal rights and a mortgage professional about your options.