What Does Getting a Mortgage After Separation Look Like?
Starting Fresh After Separation
Separation or divorce is one of the toughest financial resets you’ll face. On top of the emotional toll, there’s the question of where you’ll live - and how you’ll qualify for a mortgage on your own (or with a new partner).
The good news? While it feels overwhelming, there are clear steps and lender rules that can help you move forward. Here’s what getting a mortgage after separation really looks like.
Step 1: A Separation Agreement (or Statutory Declaration)
Before you can move forward, lenders will usually want to see a signed separation agreement. It’s not legally required, but it’s the cleanest way to prove how assets, debts, and support obligations are being divided.
If you don’t have a separation agreement, your lawyer can prepare a statutory declaration instead. This document confirms whether you do or don’t have ongoing financial obligations to your ex. Either way, lenders need something in writing to understand your financial picture.
Important distinction:
A divorce certificate simply proves the marriage has legally ended. Usually the last piece of the puzzle after everything has been settled, post-separation agreement. Not particularly helpful for our purposes as it simply states the marriage has ended and nothing further.
A separation agreement (or statutory declaration) shows who is responsible for what - property, debts, child support, spousal support, even pets. That’s what lenders care about.
A separation agreement is not a legal requirement for proceeding with a separation/divorce, but it will certainly help the process along in buying a home without incurring additional fees, and being clear on division of assets. There are ways around it, but streamlining the process is much easier with a separation agreement.
Step 2(a): If You’re Keeping the Property
If you’re staying in the home, you’ll almost always need to refinance:
You take out a new mortgage to pull out equity for the buyout through a refinance, as required by your separation agreement.
You can also extend your amortization up to 30 years by refinancing your mortgage, hopefully lowering your monthly payments and improving affordability.
At the same time, you’ll do a covenant change to remove your ex from the mortgage and title so they’re no longer financially tied to the property.
Covenant Change Alone
In rare cases, a covenant change alone may be enough without a refinance - for example, if a prenup or excluded property means no buyout is required. But here’s the catch: you’ll still need to qualify on your own for the mortgage (or with a co-signer like a new partner, parent, or sibling).
Step 2(b): If You’re Being Bought Out
If your ex is keeping the home and buying you out, you’ll need to show your lender that you’ve received the buyout funds at least two weeks before closing on your new property. Lenders want to see the money safely in your account before advancing a new mortgage.
Step 3: First-Time Homebuyer Rules After Separation
Here’s where separation can actually help. Even though you’ve owned a home before, lenders often treat you as a first-time homebuyer after a separation. That means:
Access to 30-year amortizations with insured mortgages.
Minimum down payments as low as 5%.
What you don’t get back are government rebates. Programs like the Ontario Land Transfer Tax refund are once-in-a-lifetime. If you’ve used them before, you can’t claim them again.
The Big Picture
Rebuilding after separation feels daunting. But lenders have policies that recognize life changes. With the right documents in place - whether it’s a separation agreement or statutory declaration - and a broker who knows how to navigate support payments, buyouts, and covenant changes, you can get back on your feet faster than you think.
💡 Bottom line: Separation doesn’t lock you out of homeownership. It just changes the path. Whether you’re buying fresh or keeping the family home, the right strategy makes all the difference.
Let’s chat about how I can help you navigate this as clearly as possible. I’ve worked with hundreds of clients navigating this, and I’d be happy to help you figure out this next stage of your life - with the least amount of confusion possible. Book a call here and we’ll see what magic we can work to get you through this hardship.
Jeff Dinsmore
Mortgage Broker
FSRA # 10315
TMG - The Mortgage Group
VeloMortgage.ca