Housing after you separate or divorce
Deciding to sell or keep your home
When you own a home together, you must agree whether you’ll keep it or sell it. If you keep it, you must choose who will stay in the home. If you have children, consider their needs.
When a married couple separates or divorces, both spouses usually have an equal right to stay in the family or matrimonial home.
Usually, you’re not allowed to sell, rent or mortgage the family home without the other spouse agreeing to it. This is the case unless you have a court order saying you're allowed to do so.
When a common-law couple separates, both partners don’t have an equal right to stay in the family home. Generally any property you brought into the relationship or bought during the relationship remains your own.
This means the person whose name is on the title of the home stays in the home. If both names are on the title, then you'd need to either sell the house and divide the money or one partner would need to buy the other one out. If you don’t have a cohabitation agreement, you may choose to use a lawyer or mediator to help you decide how to divide the family home.
Selling your home
You may decide to sell your home and divide the money equally. If you’re thinking about selling your home, make sure you know about all the costs involved.
Breaking your mortgage contract to sell your home
If you break your mortgage contract, you’ll usually have to pay a prepayment penalty. Banks call these prepayment charges. They can cost thousands of dollars.
Staying in the family home
If you decide to stay in the family home, you'll need to buy out your former partner. In some cases, you may need to refinance your mortgage to give your ex-partner a lump-sum payment.
Your lender will require that you requalify for the mortgage on your own. You’ll have to prove to your lender that you can afford to make the mortgage payments. Your lender may ask for certain information including:
- a separation agreement (if you have one)
- the amount of any child support payments
- the amount of any spousal support payments
If you don’t qualify for the mortgage on your own, an option is to ask another person to act as a joint borrower or guarantor. This person should have a good credit history and income. Before co-signing, make sure you both fully understand the responsibilities involved.
Once you’ve qualified for the mortgage, you need to have your former partner:
- removed from the home’s title
- released from the mortgage
You’ll have to pay fees to do this.
If you don’t release your former partner from the mortgage, he or she could continue to be responsible for the mortgage payments. If you fail to make your mortgage payments, your former partner would be required to pay.
Costs of living apart
Your daily living expenses will likely increase when you live separately. Maintaining a home on your own is more expensive than sharing the costs.
For many people, this means having less money to spend. A budget can help you make the most of the money you have.
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