A buyout is one of the most common solutions when determining what happens to a home during a divorce in Ontario. Instead of selling the property, one spouse chooses to keep the home and compensates the other for their share of the equity. This approach can provide continuity, especially when children are involved, while still ensuring a fair financial outcome for both parties.

The process begins with determining the current market value of the home, often through a professional appraisal or comparative market analysis. From this value, any outstanding mortgage or debts secured against the property are subtracted to calculate the total equity. In most cases, this equity is divided equally between the spouses as part of the broader equalization process. The spouse who wishes to keep the home must then pay the other their share, either through savings, refinancing, or other financial arrangements.

A critical aspect of a buyout is the ability to secure financing independently. The spouse retaining the home must typically qualify for a mortgage on their own, which includes meeting income, credit, and lending requirements. The existing mortgage is often refinanced to remove the other spouse’s name and to release funds for the buyout payment. While this option can be beneficial, it also comes with responsibilities, including ongoing maintenance, property taxes, and mortgage obligations. For this reason, a careful financial assessment is essential before committing to a buyout.