Refinancing the Family Home After a Divorce in Canada — What You Should Know
Divorce is never easy. It's emotionally draining, legally complex, and financially overwhelming. And when real estate is involved, it gets even trickier. One common situation that many Canadians face post-divorce is refinancing the family home. Whether you're keeping it for your children’s stability, holding onto a place full of memories, or simply because moving isn’t feasible, refinancing the home you once shared with your partner brings its own set of challenges.
This article will walk you through what refinancing after a divorce in Canada really looks like—from the paperwork and legal fees to what lenders are looking for, and the unexpected hiccups you should prepare for.
Scenario 1: “We agreed I’d keep the house—now I need to make it official”
Take Sarah and Mike, for example. After 12 years of marriage and two kids, they divorced amicably. The family home in Edmonton had a decent chunk of equity, and both agreed that Sarah would stay in the house to maintain consistency for the kids. They signed a separation agreement outlining that Sarah would buy Mike out of his equity share in the home.
She paid him his portion from her savings and thought that was the end of it—until her mortgage renewal came up. Sarah realized that Mike was still on the deed and mortgage. To fully own the home and secure her financial future, she needed to refinance and remove him from both the mortgage and property title.
What Refinancing Means in a Divorce Context
When people hear "refinancing," they usually think of negotiating a better interest rate or consolidating debt. Post-divorce, however, refinancing is often less about the rate and more about formalizing a new ownership and payment structure. In essence, refinancing after a divorce means:
Qualifying for a mortgage in your name alone
Removing your ex-spouse from the mortgage (and often the property title)
Possibly increasing the mortgage amount to buy out your ex’s share of equity
The Paperwork You’ll Need
Lenders and lawyers will want several documents in order to process the refinance:
A Legally Binding Separation Agreement
This outlines who keeps the home, how the equity is divided, and what financial responsibilities each person retains. Without this, most lenders won’t move forward.Current Mortgage Details
This includes the outstanding balance, interest rate, and lender information.Appraisal of the Home’s Current Value
If you're buying out your ex-spouse, the home must be revalued—either via a formal appraisal or a comparative market analysis.Proof of Income
You must qualify on your own for the new mortgage. This includes employment letters, pay stubs, and possibly NOAs if you're self-employed.ID and Legal Title Documents
To officially remove someone from the property title, a lawyer must update the Land Titles Office, which requires notarized documentation.
Scenario 2: “I already paid them out, but their name is still on everything”
This is more common than you’d think. Some couples sort out the money side of things informally—maybe the person keeping the house pays out their ex early—but forget or delay the formal legal steps. This becomes an issue at mortgage renewal time or when trying to sell the property later.
If your ex is still on title and/or the mortgage, they are legally tied to the property—even if you’ve handled the finances already. This can complicate future decisions and cause disputes. Only a legal title transfer and mortgage refinance will fix this.
Legal and Financial Costs to Expect
Refinancing after a divorce isn’t free. Here are some of the common costs:
Legal Fees ($1,000 – $2,000): You’ll need a real estate lawyer to manage the title transfer, draft legal documents, and remove your ex’s name from the title.
Appraisal Fee (~$350): Required by lenders to determine the home’s current market value.
Land Titles Transfer Fee: In Alberta, this is calculated as $5 per $5,000 of the home’s value, plus $1 per $5,000 of mortgage principal. For a $400,000 home with a $300,000 mortgage, that’s around $400–$500.
Discharge Fee from Current Lender (~$70): If you’re switching lenders, you’ll likely pay a discharge fee to close out the existing mortgage.
Independent Legal Advice for Your Ex (~$300–$600): If your ex must sign away their share of the property, they may require independent legal advice—sometimes at your cost, depending on your separation agreement.
Working with a Mortgage Broker vs. Your Bank
Some people stick with their current bank out of habit, but don’t rule out working with a mortgage broker. Brokers can:
Shop around for better rates
Work with lenders that specialize in post-divorce refinances
Help you qualify with more flexible income verification methods
Especially if your financial picture has changed due to the divorce, a broker can offer options banks may not.
Scenario 3: “We’re civil—but our mortgage renewal is in six months and I feel unprepared”
Planning ahead is key. If your mortgage is up for renewal in 6–12 months and you intend to keep the home, you should begin the refinance process at least 3–4 months in advance. This allows time for:
Collecting paperwork
Getting appraisals
Having your lawyer draft necessary documents
Dealing with any unexpected issues (e.g., delays in getting your ex to sign)
What Can Go Wrong?
Even with the best intentions, hiccups happen:
Appraisal comes in lower than expected, making it harder to pay your ex their share
One party refuses to sign off on the title transfer
Legal documents aren’t finalized by your refinance deadline
Lender requires conditions that weren’t previously discussed
Being proactive and working with both a legal professional and a mortgage specialist helps reduce these risks.
Refinancing vs. Porting a Mortgage
Sometimes people ask if they can “port” the mortgage instead. Porting means taking your existing mortgage (rate and term) and moving it to another property. In divorce situations, porting rarely applies unless one spouse is moving and buying a new place. If you’re keeping the existing home, you’ll typically need to refinance instead.
Final Thoughts
Refinancing the family home after a divorce is about more than just numbers—it’s about security, stability, and turning the page on a new chapter. Whether you’re staying in the home for the kids, preserving your peace of mind, or making the most practical choice, being informed is your greatest tool.
Work with professionals who understand post-divorce refinancing. Ask questions early. And make sure everything—money, title, mortgage—is officially in your name.
You’re not alone in this. Thousands of Canadians go through this each year, and with good planning, you can move forward with confidence.
