What Happens to the Mortgage if My Spouse Stays in the Home in British Columbia?
This answer covers the law of British Columbia.
Usually, no. If your spouse keeps the home, a mortgage in your name generally remains your debt to the lender, because a division between spouses does not bind a lender. Part 5 of the Family Law Act does not affect the rights of a spouse's creditors, guarantors or assignees regarding family debt.
Between the two of you, the mortgage may still be shared. Spouses are equally responsible for family debt unless an agreement or order says otherwise, even when a debt is in one name. To give effect to a division, the court can order a transfer, compensation, a sale, security or debt indemnities, which is how a buyout is ordered. Title does not decide who keeps the house, since the family home is family property regardless of whose name is on title.
How a lender treats a mortgage when one spouse stays, including whether it will release you or require refinancing, varies, so it is worth asking your lender and a lawyer before you sign anything. A court can also give one spouse temporary exclusive occupation, which does not transfer ownership.
Key takeaways
- A debt in your name stays owed to the lender by you, because a division between spouses does not bind the lender.
- Between spouses, family debt is shared equally unless an agreement or order says otherwise, even if the debt is in one name.
- A court can order a transfer, compensation, a sale, security or debt indemnities to give effect to a buyout.
- Whether a lender will release you or require refinancing varies, so confirm with the lender and a lawyer before you agree to anything.