Divorce & Mortgage Buy-Out Details, Canada, May 2024

Important data for separating / divorcing  partners, this may help with “Buying the ex-spouse out” of a divorce, when some debts need to be rolled in.

 

The way most lawyers and Big-6 banks do it:

as a refinance, max loan is 80% of the appraised value of the home,

and you get refi rates – the highest – today:

• 3 year fixed 5.76%, 5 year fixed 5.59%

and usually NO debts can be rolled into the mortgage past that 80% of the home value.

 

with OUR WAY/ Broker way…

we do it as “a purchase after marital breakdown” which allows

max loan of 95% LTV (of the home value) – which usually makes ALL THE DIFFERENCE in a buyout situation.

• BEST RATES again: 3 year fixed 5.39%, 5 year fixed 4.99%

and usually Most/ All/ some debts can be rolled into the mortgage – at no extra cost, depending on your lending ratios.

 

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Data from a similar file –

As long as the deal IS insurable (meaning it conforms to CMHC rules and guidelines) to get that lower rate – actually 0.6% LOWER as of today – then we need an offer to purchase too. Most lawyers do not want also write an “offer to purchase,”

If the Big-6 bank is doing it as a conventional refinance then an offer to purchase is not needed.

Banks don’t have substantially different rates for insurable and conventional like we do. (o.4 to o.9% rate difference makes a huge difference.)

 

So yes, we can get a separation done without an Offer to Purchase as long as at least 20% of the value stays in the home and we use refinance rates at 0.6% higher than broker best rates today.

Considering customers will leave us for 0.05% and this is 0.6% – that is >10x multiple of what customers consider “worth leaving us for” this is an important way to get divorce deals to work better for everyone.

Mortgage Mark Herman, top/ best Calgary Alberta Mortgage Broker