Separated But Still on the Mortgage? Here's What You Can and Can't Do in Alberta

November 5, 2025 | Posted by: Matt Broom-Hall

Separated But Still on the Mortgage? Here's What You Can and Can't Do in Alberta.

When your relationship ends but your mortgage obligations continue, the path forward can seem overwhelming. As Matt Broom-Hall from Hello Mortgage, I understand that separation isn't just a legal and financial event, it's an emotional journey that affects every aspect of your life.

This guide aims to provide you with clear, compassionate, and comprehensive understanding of your options and responsibilities in Alberta. Whether you're looking to keep the home, buy out your ex, or start fresh somewhere new, we'll walk you through exactly what you can and can't do.

Understanding the Reality: You're Both Still on the Hook

Here's the hard truth: when a couple separates in Alberta, the mortgage doesn't automatically adjust to reflect your new relationship status. Both parties remain legally responsible for the mortgage payments until the debt is fully paid off, refinanced, or the property is sold. This joint liability persists regardless of who lives in the home or who's actually making the payments.

Key Points You Need to Know:

• Joint Responsibility: Both names on the mortgage mean both individuals are fully responsible for the entire debt
• Credit Implications: Missed payments by your ex affect your credit score too
• Legal vs. Lender Agreements: A separation agreement doesn't change your obligations to the lender

Think of it this way: your separation agreement is a contract between you and your ex, but it's not a contract with the bank. From the lender's perspective, both parties are equally liable for the full mortgage balance until they say otherwise.

Legal Considerations: What Alberta Law Says

Under Alberta's Family Property Act, the division of property, including the matrimonial home, is subject to equitable distribution. This means the property gets divided fairly, though not necessarily equally.

The matrimonial home is treated as a unique class of marital property in Alberta. Its full market value at the time of separation is typically divided equally, regardless of who actually owns the title or whose name appears on the deed.

Important Alberta-Specific Protection:

Alberta's Dower Act provides crucial protection, even if only one spouse is on the property title, the other spouse's formal written consent is required before the home can be sold or transferred. This gives the non-titled spouse significant control over what happens to the property.

Your Three Main Financial Strategies

Here's the truth: when a relationship ends, the financial clean-up is often way messier than anyone expects, especially if you're still tied together through a mortgage. Whether you want to stay in the home, buy your ex out, or just walk away clean, you need to know what's possible.

1. Refinancing the Mortgage

This is often the first option people ask about, and for good reason. Refinancing means you take the current mortgage, pay it out completely, and replace it with a new one in your name only. It's the clearest way to untangle things.

You can typically borrow up to 80% of your home's current appraised value, so there needs to be enough equity in the property to make this work, especially if you're planning to pay your ex a lump sum as part of the agreement.

What you'll need:

• Proof of income
• Good credit (ideally 680+ for the best rates)
• A recent appraisal or valuation
• A separation agreement if the lender asks for it

This is a good fit if there's enough equity to work with and you're ready to stand on your own financially.

2. Spousal Buyout Mortgage

Now, this is where it gets interesting, and where a lot of people don't know they have options. A spousal buyout mortgage is a very specific program, built just for situations like yours. It allows one partner to stay in the home and pay the other out, even if you don't have 20% equity.

With this, you can borrow up to 95% of your home's value. But here's the catch, that extra 15%? It has to go directly toward paying out your ex. You can't use it to renovate or consolidate debt. It's strictly for equity transfer.

You'll need:

• A signed separation agreement
• A full appraisal
• Documentation of income (yes, child support counts if it's formal and consistent)

This route can feel like a lifeline when you want to stay but don't have enough equity for a conventional refinance.

3. Selling the Property

Sometimes, the cleanest move, emotionally and financially, is to sell. I say this to a lot of people who are trying to hold on out of guilt, fear, or pressure. But if the home is a financial stretch on your own, or you're both at a standoff? Selling can be the reset button.

When you sell, the mortgage gets paid out, and whatever is left over (after realtor fees, legal costs, and potential penalties) gets split as outlined in your separation agreement. It's a fresh start.

What to consider:

• Is the home realistically affordable on one income?
• Will the proceeds help or hurt your next step?
• Do you have a realtor and mortgage broker working together on the timeline and math?

If you're even thinking about this option, run the numbers. Don't assume you'll walk away with what your neighbor did, Alberta's real estate market varies wildly between Calgary, Edmonton, and smaller cities.

The Emotional Side: Taking Care of Yourself

Let's not sugarcoat it, separation is emotionally exhausting. It's not just about legal documents or who pays what. It's the quiet moments, the unraveling of routines, and the raw fear of not knowing what's next.

This isn't just a financial transaction, it's a life shift. And the way you handle the emotional side of this transition will shape how you come out the other side.

Here are a few ways to take care of yourself:

• Talk to someone you trust, regularly. Whether it's a counselor, coach, or a close friend, processing what you're going through out loud can help you move through it, not just survive it.
• Keep communication respectful, when possible. Not every separation is civil. But when you can keep the temperature down, it often speeds up resolution.
• Stay anchored in your long-term vision. It's easy to get stuck in today's stress. But zoom out. What do you want 12 months from now? Focus there.

One client from Lethbridge told me, 'The mortgage stuff was actually the easiest part, because it gave me something I could control.' Your emotional health and your financial decisions are linked. If we can get you one step closer to clarity, that's a win we'll take every time.

Case Study: Maya's Journey in Sherwood Park

Background: Maya, a 38-year-old mom from Sherwood Park, shared a home and $420,000 mortgage with her ex. Post-separation, she moved out thinking signing off the title was enough. It wasn't, her credit dropped, and she couldn't qualify for a new mortgage.

Solution: We helped her use a spousal buyout mortgage at 3.99% (insured). The home appraised at $500,000, and she borrowed $475,000 to pay out her ex, cover legal costs, and refinance solely under her name. She qualified using her income plus child support.

Outcome: Maya owns the home, her kids have housing stability, and she's financially independent.

Frequently Asked Questions

Can I remove my ex-spouse's name from the mortgage without refinancing?
No. A lender must approve a refinance under your name only.

Can I use child support to qualify for a mortgage?
Yes, if it's legally documented and consistently received over 3–6 months.

What if I can't afford to buy my ex out?
You may need to sell or work out a co-ownership agreement until your situation improves.

Will the old mortgage affect my ability to buy a new home?
Yes, unless you're legally released from liability or have offsetting agreements recognized by the lender.

Take the First Step Toward Clarity

The key to managing your mortgage post-separation is clear communication with your ex, proper legal documentation, and early consultation with both a family lawyer and a mortgage professional who understands separation-related mortgages.

Ready to explore your options? Book a consultation with our team and let's start building a plan that works for your specific situation. You don't have to navigate this alone.

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