Mortgage Refinancing: The Best Way to Keep Your House in a Divorce?

Posted on 3rd July 2015

Getting married and buying a home are two major milestones. Unfortunately, according to the latest data from Statistics Canada, the average duration of marriage for those who get divorced in Canada is 13.7 years.1

If you are getting a divorce and keeping the house is an option, there are a number of different mortgage refinancing solutions you can consider and discuss with an experienced mortgage broker.

Refinancing a Mortgage in the Event of a Divorce

For most married couples, a home is their biggest asset; helping them build up equity for retirement. A home can also be the biggest asset when going through a divorce; selling it and providing both partners with enough equity for a fresh start.

Most people just presume that you need to sell a home if you are getting a divorce. You don’t. If you are in the midst of getting a divorce and keeping the house is an option, refinancing a mortgage to buy-out your spouse’s interest in the home may be your best option.

In Canada, you can borrow up to 80% of a home’s appraised value when refinancing. For example, if your home is worth $500,000, you can refinance up to $400,000. In today’s ultra-low interest rate environment, refinancing a mortgage makes a lot of sense.

Not only does mortgage refinancing allow you to buy out your spouse’s equity, refinancing can give you more flexibility. This could include refinancing at a better rate, modifying the amortization period, and even lowering your monthly payments.

There are also other options if you want to stay in your home. A home equity line of credit (HELOC) allows you to re-borrow a portion of the equity you have built up in your home. Best of all, it’s a revolving line of credit, that means you can use it whenever and however you like.

The borrowing rules on a HELOC are different than mortgage refinancing. A HELOC is available to homeowners that have at least 20% equity in their property. Other qualifications include a steady income and good credit score. With a HELOC, you can access up to a maximum 65% of your home’s value. Your HELOC and home balance cannot equal more than 80% of your home’s value.

Getting a divorce is never easy. And thinking about current mortgage rates and refinancing your mortgage may not be a top priority right now. But eventually, you will need to consider your options. The Country’s Refinancing Leader

If you’re getting divorced and are feeling overwhelmed, the licensed, independent agents at can help. They will provide you with objective, personalized mortgage refinancing advice that will help you make the best, most informed decision possible.

To review your mortgage refinancing options, contact today or apply online and a mortgage specialist will set up an appointment at your earliest convenience.

1. “Marital Status Overview 2011,” Statistics Canada web site;

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