Spousal buyout mortgage —
keep the home after separation,
insured up to 95% of value.

It's a mortgage that lets one co-owner finance the home to buy out the other owner's interest. Some mortgage insurers (Sagen, for example) treat a buyout between co-owners as a purchase, not a refinance, so it can be insured up to 95% LTV. Because it's structured as a purchase rather than a refinance, you get up to 95% instead of the normal 80% refinance limit. Purchase rules apply too: the home must be valued under $1.5 million, and the minimum equity is 5% of the first $500,000 plus 10% of the rest. It exists precisely so families don't have to sell the home just to divide its equity.

You need written proof of the buyout. A signed separation agreement is the usual document — Sagen also accepts a court order or an agreement of purchase and sale between the owners — and it must clearly state that you are retaining the property and specify the buyout amount. Lenders use it to confirm the funds are going to a legitimate spousal buyout, not a cash-out refinance in disguise. If you don't have one yet, we'll coordinate with your family lawyer on the wording lenders need before you finalize it.

Under the insured-purchase route, generally no. The proceeds pay out the existing mortgage and your former partner's share. Some insurers and lenders also allow joint debts named in the agreement; we confirm this with the specific lender. You can't use it to consolidate unrelated debt or take extra cash. If you need broader access, we'd look at a conventional 80% refinance instead and compare the two.

That's the real test. The home now has to be carried by you alone, so lenders apply the standard debt-service ratios and stress test to your income. The good news: court-ordered or agreement-based child and spousal support you receive can count as qualifying income, with proof it will continue; lenders typically want 3–6 months of support received, varying by lender. We'll model your ratios before you commit so there are no surprises.

It can. If you're the one paying child or spousal support, lenders treat those payments as a monthly obligation that reduces how much mortgage you can carry — similar to a loan payment. We factor it in from the start and, where it's tight, look at the structures (or lenders) that treat support most favourably.

Very common — joint accounts, missed payments during the chaos, a temporary income gap. If your credit no longer qualifies for the insured route, B-lenders and private lenders can still fund the buyout on an equity basis, and we map your exit back to A-lender pricing once things stabilize. The home doesn't have to be lost over a rough credit patch.

Often, yes. Sagen's policy applies to any borrowers on title, regardless of their relationship, so common-law partners and other co-owners can use it; other insurers and lenders set their own rules. What matters is the ownership and the agreement dividing it, not the marital label. A cohabitation or separation agreement specifying the buyout serves the same purpose as a married couple's.

An appraisal establishes current market value — on a Sagen-insured buyout, Sagen requires a full interior appraisal and completes it itself — and the 95% limit is calculated against that figure. Sometimes the value in your separation agreement differs from the appraisal. We'll flag that early because the financing is based on the appraised number, and a gap can affect how much you can actually pull out.

Because the insured-purchase route is insured, you pay a default-insurance premium (added to the mortgage, with 8% PST on the premium in Ontario payable at closing), but in exchange you get competitive A-lender interest rates — it's not a high-rate product. For many people the insured premium is far cheaper than the alternative of selling the home, paying realtor commissions, and re-entering the market as a single buyer at today's prices.

Once you have a signed agreement and we have your documents, in our experience a clean insured file funds in about 2–4 weeks — similar to a purchase. The most common delay is the separation agreement wording, which is why we get involved with your lawyer early so the financing and the legal side line up the first time.