Keeping the House: A Guide to the CMHC Spousal Buyout Program in Red Deer
Going through a separation is tough enough without adding housing stress on top of it.
If you are trying to find a way for one of you to keep the family home without using up all your savings, there’s good news. There’s a program made just for this situation.
The CMHC Spousal Buyout Program is a mortgage option that isn’t discussed often. But it can make a big difference when you’re going through a separation.
What Is the CMHC Spousal Program?
When couples separate, and one person wants to stay in the home, they usually need to buy out their partner’s share of the equity. This often means coming up with a large sum of money, which most people don’t have.
The CMHC Spousal Buyout Program allows you to refinance your mortgage for up to 95% of your home’s value (on homes valued up to $500,000), and 90% on the portion above $500,000, up to $1.5 million. This is significantly higher than a traditional refinance, which is typically capped at 80% of your home’s value. This increased borrowing flexibility allows you to access more of your home equity, making it easier to pay out your ex-partner’s share—without needing a large amount of cash upfront or draining your savings.
Why 95% Makes All the Difference
Let's say your Red Deer home is worth $450,000, and you still owe $250,000 on the mortgage. That means you have $200,000 in equity that you and your ex-partner would typically split 50/50.
With a regular refinance, you could only borrow up to 80% of your home's value, which is $360,000. After paying off your existing $250,000 mortgage, you'd have $110,000 left. That may not be enough to give your ex-partner their $100,000 share and cover legal fees associated with the transfer of title, the separation or other expenses.
With the CMHC spousal buyout program, you can refinance up to 95% of the home's value, or $427,500. After paying off the $250,000 mortgage, you would have $177,500 left. This allows you to pay your ex-partner their $100,000, cover legal costs, and possibly address some joint debts.
That extra 15% in borrowing power makes it possible for many people to keep their homes.
What You Need to Qualify
The CMHC spousal program has some specific requirements, but they are straightforward:
This program also works for common-law couples, not just those who are married. As long as both of you own the property together, you can use this option.
Process and Details
Why Work with a Mortgage Broker for This?
I know which lenders do these. Not every lender offers the CMHC spousal program, and the ones that do have different qualification criteria. I can shop your application to multiple lenders to find you the best rate and terms.
I understand the documentation. Separation agreements can be complicated, and lenders want to see specific language outlining how the funds are being used. I can review your agreement in advance and flag anything that might cause problems, helping you avoid delays down the road.
I can make a sensitive process easier. The last thing you need during a breakup is to be running around to different banks, explaining your personal situation over and over. I handle the legwork, communicate with the lenders, and keep things moving, so you can.
What If You Can't Qualify Alone?
This is a common concern, and it is understandable. You may have relied on two incomes to afford the mortgage, and now you are on your own. Or the buyout amount plus the new mortgage payment may exceed your income.
You have options:
Bring in a co-signer. A parent, sibling, or new partner can co-sign the mortgage with you, using their income and credit to help you qualify.
Did You Know You Can Qualify as a First Time Home Buyer
Yes you can, check out my blog https://jackielynk.ca/blog_post?id=2542 for more information.
Let's Talk About Your Situation
If you are going through a separation and need help with your housing situation, I am available to talk. We can review your specific numbers, discuss if the CMHC spousal program is right for you, and create a plan.
I understand this process is stressful, and it is one of the more emotionally challenging situations I help people with. That is why I take it seriously. It is not just about mortgages and numbers; it is about helping you move forward.
You can call or email me at jackie@tmcweconnect.ca, and we will go from there. There is no pressure or judgment—just honest guidance when you need it.
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