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Spousal Buyout vs Refinance

Spousal buyout vs refinance: how to keep the home after a separation

When one partner keeps the home after a separation, they usually need to refinance to pay out the other's share. A standard refinance caps you at 80% of the home's value — often not enough. The insured Spousal Buyout Program lets you borrow up to 95% specifically to buy out an ex, making it possible to keep a home a regular refinance couldn't.

Refinance = up to 80%Spousal buyout = up to 95%Needs a separation agreementInsured, lower-rate optionSensitive, multilingual support
5-star rated| FSRA #13737| 5-min pre-qualification

Written by the Mortgage Squad Advisors Editorial Team · Reviewed by the Principal Broker, FSRA #13737 · Updated June 2026

The short answer

Use a regular refinance to buy out your ex if you have enough equity that 80% of the home's value covers your existing mortgage plus their share — it's straightforward and you keep the standard rules. Use the insured Spousal Buyout Program if you need to borrow more than 80% (up to 95% of the home's value) to complete the buyout, which is common when there isn't much equity. The program is purpose-built for separation: it treats the transaction as a purchase, requires a signed separation agreement specifying who gets what, and the funds must go only to buying out the other party and paying off joint debts. Both options require you to qualify for the new mortgage on your own income.

At a glance

Which one is built for you?

A

Regular refinance

Replace the joint mortgage with a new one in your name, borrowing enough to pay out your ex — capped at 80% of the home's appraised value.

Best for
  • You have substantial equity (80% covers mortgage + their share)
  • You want the simplest path with standard rules
  • You qualify comfortably on your own income
  • You don't need to stretch past the 80% limit
B

Spousal Buyout Program

An insured program built for separation that lets you borrow up to 95% of the home's value specifically to buy out your former partner.

Best for
  • 80% isn't enough to cover the mortgage + your ex's share
  • There's limited equity in the home
  • You have a signed separation agreement
  • You want to keep the home and can carry it solo
Side by side

The full comparison

FactorRegular refinanceSpousal Buyout Program
Maximum borrowing80% of appraised valueUp to 95% of appraised value
Treated asA refinanceA purchase (insured)
Separation agreement required?Not necessarilyYes — must specify the buyout terms
Use of fundsFlexible (within refinance rules)Only buyout + paying off joint debts
Default insuranceNot insured (conventional)Insured (CMHC/Sagen/Canada Guaranty)
Qualify onYour income aloneYour income alone
Best whenLots of equityLimited equity, need >80%
RateUninsured refinance pricingOften lower insured pricing
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The problem: 80% often isn't enough

When a relationship ends and one person wants to keep the home, they typically have to buy out the other's share of the equity and remove them from the mortgage and title. The natural tool is a refinance — but a standard refinance in Canada is capped at 80% of the home's appraised value. That ceiling has to cover your existing mortgage and the cash you owe your ex for their half of the equity.

Do the math and the gap appears fast. If your home is worth $700,000 with a $400,000 mortgage, 80% is $560,000 — leaving only $160,000 to pay out a partner whose share might be larger. In many separations, especially where the mortgage is still substantial relative to the home's value, a regular refinance simply can't borrow enough to complete the buyout. That's exactly the gap the Spousal Buyout Program was created to close. See our spousal buyout page for the full picture.

How the Spousal Buyout Program works

The Spousal Buyout Program is an insured mortgage program (offered through CMHC, Sagen, and Canada Guaranty) designed specifically for this situation. Its defining feature: it lets you borrow up to 95% of the home's appraised value — far more than a regular refinance — because it treats the transaction as a purchase (you're 'buying' the home from the partnership) rather than a refinance.

That higher limit comes with focused rules. You need a signed separation agreement that clearly sets out the buyout — who keeps the home, what's owed, and the division of assets. The funds can be used only to buy out the other party's share and to pay off joint debts specified in the agreement — not for general cash-out. And because it's insured, there's a premium (added to the mortgage), but insured deals often come with a lower rate than uninsured refinances, which partly offsets it. Our step-by-step guide covers the documents and process.

What both paths require: qualifying on your own

Whichever route fits, one reality is constant: you must qualify for the new mortgage on your own income. The household went from two incomes to one, and the lender needs to see that you can carry the full mortgage — and pass the stress test — solo. This is the part that catches people off guard, and it's worth checking early, before emotions and timelines force a rushed decision.

If your income alone supports it, keeping the home is very achievable through one of these two paths. If it's tight, there are options — a co-signer, adjusting the amortization to lower the payment, or reassessing whether keeping the home is the right financial call. We'll run the numbers honestly and tell you what's realistic, without pressure. This is a stressful, sensitive time, and our role is to make the mortgage piece clear and calm — we can walk you through it in 50+ languages if that helps you or your family.

Which one is right for you?

The deciding factor is almost always how much you need to borrow relative to 80%. If your existing mortgage plus your ex's share fits inside 80% of the home's value, a regular refinance is the simpler path — standard rules, no separation-agreement requirement beyond what's prudent, and flexibility in how funds are used. If completing the buyout requires borrowing more than 80% — up to 95% — the Spousal Buyout Program is likely your only way to keep the home, and it's purpose-built for exactly that.

Because the right choice hinges on your home's value, your current balance, your ex's share, and your solo income, this is a situation where early, specific advice matters. As an independent brokerage we can access both conventional refinances and the insured buyout program across many lenders, compare them on rate and cost, and coordinate timing with your separation agreement and lawyer. Reach out before you commit to anything — a few minutes now can change what's possible. Maya is available any time, day or night.

Your situation

Which is right for you?

Lots of equity, modest mortgage

Usually: Regular refinance

If 80% of the home's value comfortably covers your mortgage plus your ex's share, a standard refinance is the simplest, cleanest route.

Limited equity, need to borrow >80%

Usually: Spousal Buyout Program

Borrow up to 95% specifically to buy out your partner. Often the only way to keep a home a regular refinance can't stretch to cover.

You're not sure you qualify solo

Usually: Check early, either way

Both paths require qualifying on your own income. Get a realistic assessment before timelines force a decision — options exist if it's tight.

No separation agreement yet

Usually: Start the agreement

The buyout program requires a signed separation agreement specifying the terms. Get that in place with your lawyer; we'll prep the financing in parallel.

FAQ

Common questions, answered.

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What's the difference between a spousal buyout and a regular refinance?
A regular refinance lets you borrow up to 80% of your home's appraised value to pay out your ex, with standard rules. The Spousal Buyout Program is an insured program that lets you borrow up to 95% — specifically to buy out a former partner — because it treats the transaction as a purchase. The buyout program is the answer when 80% isn't enough to cover your mortgage plus your ex's share, which is common when equity is limited.
How much can I borrow to buy out my spouse?
Through a regular refinance, up to 80% of the home's appraised value. Through the insured Spousal Buyout Program, up to 95%. The higher limit of the buyout program is often what makes keeping the home possible when there isn't much equity. In both cases the funds for the buyout must cover your existing mortgage and your ex's share of the equity, and you must qualify on your own income.
Do I need a separation agreement for a spousal buyout?
Yes. The Spousal Buyout Program requires a signed separation agreement that clearly sets out the buyout terms — who keeps the home, what's owed to whom, and the division of assets and debts. The funds can only be used to buy out the other party and pay off joint debts specified in the agreement, not for general cash-out. A regular refinance doesn't strictly require one, but legal clarity is always wise.
Can I keep the house after a separation on one income?
Often yes — but you must qualify for the new mortgage on your own income and pass the stress test solo, since the home is moving from two incomes to one. This is the key thing to check early. If it's tight, options like a co-signer or a longer amortization to lower the payment may help. An honest assessment up front tells you what's realistic before timelines force a rushed call.
Is the spousal buyout program's rate higher because it's insured?
It carries a default-insurance premium (added to the mortgage), but insured mortgages often have a lower interest rate than uninsured refinances, which partly offsets the premium. So the all-in cost can be quite competitive — and for many separating homeowners the program is the only route that allows keeping the home at all, since a regular refinance caps out at 80%. A broker can compare the true cost of both for your situation.

Keep exploring

Spousal buyout mortgageJoint vs sole mortgageRefinancingInsured vs conventionalLower the payment: 30-yearAffordability on one incomeStress test calculatorBank vs brokerSpousal buyout guide
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