Buying Out a Co-Owner in Canada.
Leaving a shared home means a new mortgage for the person who stays and a title transfer a lawyer registers. The dollar example on this page is labelled as an example and uses the contract rate from the rates file. It is not tax or family-law advice.
Someone wants out. The house still has one mortgage with more than one name on it. The person leaving wants their share of the equity. The person staying wants the house. Those are three different jobs: agree the number, get the lender to put the loan in the remaining name, and have a lawyer transfer title.
This sits beside co-buying a home in Canada and the co-ownership agreement checklist. If you are still deciding whether to buy together, write the exit before you close. If you are already in the house, the same topics are the agenda, just later.
What you are actually buying
You are not buying “half a mortgage payment.” You are buying the departing owner’s share of the equity, and you are asking the lender to lend the remaining balance plus that buyout to whoever stays.
Equity is the value you agree, minus the mortgage that is still owing. The departing owner’s cheque is their percentage of that equity, adjusted for anything your agreement says is paid back first, such as an unequal deposit that was a loan rather than a gift. This page does not invent those adjustments. If the agreement says extra cash comes off the top, follow that. If you have no agreement, you and your lawyers have to decide the split. Provincial default rules are not summarized here.
The new mortgage is not the old payment divided by two. It is whatever balance the lender will register for the person who remains. If they finance the buyout, the balance goes up by the cheque to the person who leaves, less any cash the stayer brings.
The lender’s file is new
A joint mortgage paid by one person is still a joint mortgage. The lender does not drop a covenant because one roommate moved out. The remaining borrower is underwritten again: income, debts, credit, and one stress-test payment on the new balance. If a third person was only a co-signer, they are liable until the lender releases them. The co-buying chapter explains co-borrower versus co-signer. Release language has to be in the new paperwork, not in a group chat.
Bring the same documents you brought the first time. The income pages at income needed show how a balance, a rate, tax, and heat turn into a gross-income figure. Use them as a check, then let the lender run the real file.
A lawyer transfers title
Title does not follow the bank’s approval letter by itself. A lawyer (or notary, where that is who closes) pays out the departing owner, pays the old charge if it is being replaced, and registers the new owners and the new mortgage. Until that registration is done, the departing owner is still on title and, if the old mortgage is still open, still on that debt.
Do not skip this because you trust each other. The trust is why you need the paper. The lawyer will also tell you which affidavits and consents that province wants. This article does not list them.
The example
The block below uses the contract rate on the rates file. The value, the balance, the 50/50 split, and the tax figure are assumptions so you can see the steps. Swap in your appraisal and your statement before you promise anyone a cheque.
Worked example, labelled as an example
These inputs are assumed so the arithmetic is visible. They are not a price for any city, and they are not a tax or family-law outcome. Assumed value $600,000. Assumed remaining mortgage $360,000. Two owners, 50/50. Equity is $240,000. The departing owner’s half is $120,000. If the person who stays finances that buyout on top of the remaining balance, the new mortgage is $480,000.
Contract rate 4.14%, 5-year fixed, insured, Desjardins, as of 2026-09-03. Payment at that contract rate over 25 years: $2,561 a month. Stress-test rate 6.14%. With an assumed $300 a month of property tax and $100 of heat, and no other debts, gross income of about $108,035 a year makes GDS bind. Change any assumed input and the income changes.
If the income in that example is higher than the stayer earns, the buyout does not fit on one income at those assumptions. Options that stay inside the mortgage math are a lower buyout (more cash from the stayer, or a lower agreed value), paying debts down before you apply, or selling instead of buying out. Those are arithmetic choices. They are not a recommendation to take a particular product.
What this page will not tell you
It will not tell you the tax on a sale of a share, the tax on a deemed disposition at death, or how a family-property statute splits a house when partners separate. Those outcomes depend on facts this page does not have, and they are not in the mortgage library. Ask the lawyer who is papering the transfer, and ask an accountant if anyone is worried about tax. If you are married or common-law, say that at the start of the meeting. A co-ownership agreement between partners can sit beside family-property rules. It does not silently replace them.
Insurance and wills are the other gap. Tenants in common do not pass a share by survivorship. If a will and the agreement disagree, you have a dispute, not a plan. The checklist page lists death and breakup as topics to cover. It is still not a will.
Order of operations
- Read the agreement, if you have one, for the valuation method and the right of first refusal.
- Get the current mortgage statement and agree which value you are using.
- Run the new balance through the affordability calculator with the stayer’s income and debts only.
- Ask the lender for an approval on that balance before anyone moves out relying on the cheque.
- Have the lawyer close the transfer and confirm the departing owner is released from the mortgage.
Until step 5 is finished, both of you are still in the deal you signed the first time.