- Taking a spouse off title and taking a spouse off the mortgage are separate steps, and how the second one works depends on your mortgage and your situation, so it is worth confirming with a lawyer.
- A spouse with a right of possession in the matrimonial home keeps the same right of redemption or relief against forfeiture as the owner-spouse and is entitled to the same notice of the lender's claim.
- Refinancing or moving the mortgage can cost money, including a prepayment penalty that is usually the higher of 3 months' interest or the interest rate differential.
After a separation, one spouse often wants to keep the home. That usually means two things: taking the other spouse off the mortgage and taking them off the title to the property.
These are different steps with different people involved. This article explains how they generally work in Ontario and what to raise with a lawyer.
The mortgage and the title are separate
The mortgage is your contract with the lender. Title shows who owns the property.
Until the lender agrees in writing, do not assume the departing spouse is released. Ask the lender what it requires and review your mortgage documents with a lawyer.
How the lender decides
A lender will usually look at whether the remaining spouse can carry the mortgage alone. Be ready to show your income, other debts and the value of the home.
Common routes include asking your current lender to take over the mortgage in your name alone, or refinancing with a new mortgage. When borrowing against home equity you can usually borrow up to 80% of your home's value, minus what you still owe.
Ending a mortgage early has a cost. The prepayment penalty is usually the higher of 3 months' interest on what you still owe or the interest rate differential. Check your mortgage for its specific terms before you decide.
Your spouse's rights in the home
A spouse who has no ownership interest in the matrimonial home but has a right of possession has the same right of redemption or relief against forfeiture as the owner-spouse, and is entitled to the same notice of the lender's claim and its enforcement.
If the lender uses a power of sale, the notice of sale must go to every person having an interest in the property. When a Transfer under Power of Sale is registered, a statement of spousal status is required for every person whose spouse was not served with a notice under the Mortgages Act and whose interest is to be deleted.
Stay current while you sort it out
Missed payments during a separation can create problems for both of you. A borrower in default can stop the lender from enforcing the acceleration clause by paying the arrears and the lender's necessary expenses. Agree in writing on who pays what until the mortgage is changed.
If money is tight, ask the lender about relief. A payment deferral is an agreement with the lender, not a right, and interest keeps accruing and is usually added to the principal.
Working with a broker and next steps
If you use a mortgage broker, mortgage brokerages, brokers and agents in Ontario are licensed by FSRA, and you can check a licence on FSRA's public listing. A brokerage must disclose material risks in writing and any conflict of interest.
- Get the separation terms about the home in a written agreement.
- Ask your lender what it needs to remove a name from the mortgage.
- Gather income records and any debt statements.
- Find out any prepayment penalty before ending the mortgage.
- Have a lawyer review how title will be transferred.
Frequently asked questions
Can I take my spouse off the mortgage without the lender?
Not necessarily, because the mortgage is a contract with the lender, and how a change to it works depends on your mortgage and your situation. How a separation agreement affects that contract depends on its terms and your circumstances, so it is worth confirming with a lawyer.
Is taking someone off title the same as taking them off the mortgage?
No. Title shows ownership, while the mortgage is the debt. Both usually need to be dealt with, and a lawyer can help you with the title side.
Does my spouse keep rights if they are not on title?
A spouse with a right of possession in the matrimonial home has the same right of redemption or relief against forfeiture as the owner-spouse, and is entitled to the same notice of the lender's claim.
Will I pay a penalty to refinance?
Possibly. The prepayment penalty for breaking a mortgage contract is usually the higher of 3 months' interest on what you still owe or the interest rate differential.
Sources
- Ontario.ca – Power of sale assignments (policy) — ontario.ca
- Court of Appeal for Ontario – 2544176 Ontario Inc. v. 2394762 Ontario Inc., 2022 ONCA 529 — ontariocourts.ca
- CanLII – Family Law Act, R.S.O. 1990, c. F.3 — canlii.org
- Ontario.ca – Land Registration Bulletin 2003-1 Powers of Sale — ontario.ca
- Financial Consumer Agency of Canada – Borrowing against home equity — canada.ca
- FSRA – Licensed Mortgage Brokerages, Administrators, Mortgage Agents, and Mortgage Brokers — fsrao.ca
- CanLII – O. Reg. 188/08 (MBLAA) — canlii.org
- Financial Consumer Agency of Canada – Mortgage payment deferrals — canada.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a real estate question
Start a file online — flat, published fees, reviewed by a licensed lawyer before a dollar is owed.