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Can You Remove a Spouse from a Mortgage in Canada?

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Life circumstances change, and sometimes, that means adjusting financial commitments like a mortgage. If you’re wondering, “Can I remove my spouse from our mortgage in Canada?”, the answer is yes—but it’s not always simple. 

Whether due to divorce, separation, or financial restructuring, removing a co-borrower from a mortgage requires careful planning and approval from your lender.

Here’s a complete guide by Pradip Maheshvari Mortgages to help you navigate this process smoothly.

What Is Mortgage Liability?

When two people take out a mortgage together, both are legally responsible for repaying the loan. 

This means that even if one person moves out or agrees to give up ownership, they’re still on the hook for mortgage payments until their name is officially removed.

How to Remove a Spouse from a Mortgage in Canada?

Lenders won’t simply remove a name from a mortgage without ensuring the remaining borrower can handle the payments alone. Here are the main ways to achieve this:

1. Mortgage Refinancing

Refinancing is the most common way to remove a spouse from a mortgage. This involves replacing the existing mortgage with a new one in your name alone. To qualify, you must:

  • Prove sufficient income to cover the mortgage.
  • Have a strong credit score.
  • Pay out any agreed-upon equity to your spouse if required.

Example: If your home is valued at $500,000 and your spouse owns 50% equity, you may need to refinance and buy out their $250,000 share.

2. Assumption of Mortgage

Some lenders allow a mortgage assumption, where one borrower takes over the loan without refinancing. However, not all lenders offer this option, and approval depends on your financial standing.

3. Selling the Property

If refinancing or assuming the mortgage isn’t possible, selling the home and splitting the proceeds might be the best option. This is common in cases where neither party can afford the home alone.

4. Legal Agreement & Spousal Buyout Program

For divorcing couples, the Spousal Buyout Program allows one spouse to keep the home by buying out the other’s share using up to 95% loan-to-value refinancing. This program helps prevent forced home sales due to separation.

Key Considerations Before Removing a Spouse

Lender Approval: The lender must approve any mortgage changes based on your financial stability. 

Equity Payout: If your spouse has ownership, they may be entitled to a share of the home’s equity.

Legal Documentation: A lawyer may be required to remove a name from the mortgage and update the title.

Credit Impact: Refinancing or assumption affects both credit scores, so consider the long-term financial impact.

Get Expert Help to Restructure Your Mortgage!

Removing a spouse from a mortgage isn’t always straightforward, but with the right strategy, it’s possible. 

Whether you need refinancing, a buyout, or other solutions, Pradip Maheshvari Mortgages is here to help you find the best path forward.

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