Buying a home together is one of the biggest financial decisions a couple makes. Whether you are married, common-law, or newly committed, there are important decisions that affect your qualification, protection, and what happens if things change.
Joint vs. individual mortgage application
| Joint Application | Individual Application | |
|---|---|---|
| Income | Combined income of both partners | Single income only |
| Debts | Combined debts of both partners | Single applicant’s debts only |
| Credit | Both scores assessed — weakest may affect rate | Only one score matters |
| Qualification | Usually qualifies for more | May qualify for less — but avoids carrying partner’s debt |
| Liability | Both jointly liable for full mortgage | Only the applicant is liable |
| Best when | Both have good credit and manageable debt | One partner has poor credit, high debt, or irregular income |
When to apply with one person only
| Situation | Why It Helps |
|---|---|
| One partner has credit score under 650 | Joint application may get a higher rate or be declined |
| One partner has a large car loan or student debt | Their debt raises the TDS ratio and reduces buying power |
| One partner is self-employed with limited history | Less than 2 years of self-employment income is hard to qualify with |
| One partner has a recent bankruptcy or consumer proposal | Disqualifies or severely limits joint application |
Important: Even if only one person is on the mortgage, both can be on the title. And regardless of who is on the title, married spouses have equal rights to the matrimonial home.
Title options for couples
| Title Structure | What It Means |
|---|---|
| Joint tenants (most common for couples) | Equal 50/50 ownership with right of survivorship — when one dies, the other automatically gets full ownership |
| Tenants in common | Can be unequal shares, no automatic survivorship — each person’s share goes to their estate |
Recommendation: Married couples almost always use joint tenancy for the survivorship benefit. Common-law couples should carefully consider tenants in common if contributions are unequal.
Married vs. common-law: the legal differences
| Issue | Married | Common-Law |
|---|---|---|
| Matrimonial home protection | Automatic — cannot sell or mortgage without spouse’s consent | No automatic protection in most provinces |
| Property division on separation | 50/50 division of family property (most provinces) | Property belongs to title holder unless agreement exists |
| Spousal support obligation | Yes | Yes (in most provinces after 2–3 years) |
| Estate rights | Automatic inheritance rights | No automatic rights — must be in will |
| BC exception | Standard rules | After 2 years, treated same as married for property division |
Common-law couples: protect yourself
If you are common-law and buying together, a cohabitation agreement is essential. Without one, if the relationship ends:
- The partner whose name is on the title keeps the property
- The partner who contributed to the down payment or mortgage payments may have to go to court to recover their investment
- Legal costs for an unjust enrichment claim: $20,000–$50,000+
A cohabitation agreement costs $1,500–$3,000 and avoids all of this.
How to handle the down payment
| Scenario | How to Document It |
|---|---|
| Equal contributions | Simple — each contributes 50% from their own accounts |
| Unequal contributions | Document each amount in writing; can structure as a gift, loan, or equity adjustment |
| One partner gifts the entire down payment | Gift letter (for lender) plus notation in cohabitation/prenup agreement |
| Parents gift to one partner | Gift letter for lender; decide whether it creates unequal ownership or is a gift to the couple |
Why documentation matters: If you separate, the down payment source becomes central to the property division. Without written records, it becomes a “he said / she said” dispute.
Protecting yourself with a prenup or cohabitation agreement
| What the Agreement Covers | Why It Matters |
|---|---|
| Who contributed what to the down payment | Establishes baseline equity split |
| How mortgage payments are shared | Creates a record of contributions |
| What happens to the home if you separate | Avoids court battles |
| Who keeps the home if both want it | Right of first refusal with fair valuation method |
| How equity growth is divided | Proportional to contribution, equal, or some other formula |
| What happens if one person pays significantly more | Adjustment mechanism (e.g., equity credited for extra payments) |
What happens if you separate
Married couples
| Option | How It Works |
|---|---|
| Sell the home, split proceeds | Most common — cleanest path. Net proceeds (after mortgage payoff and selling costs) split per separation agreement or court order. |
| One spouse buys out the other | Buying spouse refinances into their name only, pays the other their share of equity. Must qualify individually. |
| Deferred sale | Home is kept (usually for children’s stability) and sold at a future date. Both remain on the mortgage until then. |
Common-law partners
| If You Have an Agreement | If You Don’t |
|---|---|
| Follow the terms of your cohabitation agreement | Property goes to the title holder |
| Buyout calcuated per agreement’s formula | Other partner may sue for unjust enrichment |
| Dispute resolution clause avoids court | Court is expensive ($20,000–$50,000+) with uncertain outcomes |
Mortgage implications of separation
| Issue | Detail |
|---|---|
| Both remain liable until refinanced | Even if you agree one person keeps the home, both are liable on the mortgage until the lender approves a release |
| Qualifying on one income | The remaining spouse must qualify for the full mortgage alone — may need to reduce the balance |
| Credit impact | If the mortgage goes unpaid during a dispute, both credit scores are damaged |
| Timing | Give yourself 3–6 months for the refinance process |
Financial planning as a couple
| Decision | Options |
|---|---|
| Joint bank account for housing | Set up a shared account funded by both partners for mortgage, taxes, insurance — keeps household costs transparent |
| Emergency fund | Maintain 3–6 months of housing costs as a couple (mortgage + taxes + insurance) |
| Life insurance | Consider term life insurance equal to the mortgage balance — if one partner dies, the other can keep the home |
| Disability insurance | Protects income if one partner cannot work — more important than mortgage life insurance from the bank |
| Will update | Update wills to reflect home ownership, especially for common-law couples without automatic inheritance rights |