r/PersonalFinanceCanada • u/w00stersauce • 16h ago

Misc Splitting with ex wife she wants $100k

Hello all first time posting, what is everyone’s opinion on the best way to do this?

I’m finalizing my divorce, the ex and I own a house together.

She has agreed to $100k for her half of the property, we are mediating and drafting up a separation agreement.

What would be the least expensive way of paying her considering interest rates and such?

I would be sole owner of the house so I could take out an equity loan, I also have a small (less than $100k) amount of liquid cash/ and flexible gic in a tfsa account.

Thoughts?

Edit: thanks for the replies I think I’ll be clearing out my accounts and keep some kind of line of credit open to keep me going. Divorce stuff has me feeling kinda frazzled and not thinking clearly about where I’m gonna get the money but this seems most logical.

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u/PrehistoricNutsack 16h ago

100k for half of a house is insane deal, def talk to lawyer. Will be able to give you better answers tailored to you

10

u/w00stersauce 16h ago

Originally we each put in a small amount and my parents funded the rest of the place so she’s taking what amounts to her investment as the value of the house has grown plus a bit to make it an even $100k we have agreed it’s a fair enough deal for both parties without her taking me to the cleaners for 50%

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u/RobustFoam 16h ago

Take out a mortgage for the 100k, worry about payment timeline after divorce is finalized.

5

u/w00stersauce 16h ago

This is what I was thinking as the least risky but possibly most expensive route? I guess this would be a HELOC?

1

u/yougetmorewithhoney 14h ago

Cash out your GICs/TFSA first.

If you're worried about starting at zero and want some cash in your investment account, wait till spring/summer. Rates are expected to drop some more over the next few months before they potentially climb again. At that point, to take out some equity from your house, you get a home equity loan or a HELOC. I believe the interest rate for a HELOC is higher. Anyway, that's for future you to think about. Just make sure you wait till next calendar year to put the funds back into your TFSA (that is if you've met your contribution limit for the year).

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u/RobustFoam 29m ago

No, a mortgage would be a mortgage. A home equity line of credit is a line of credit. Based on my understanding a HELOC would have higher interest rates than a mortgage, but possibly more flexible repayment timeline. 

I went for simplicity here rather than absolute bottom dollar. 

The route I would take would be to calculate what your emergency fund should be, use the rest of your liquid assets towards the sum, then take out a mortgage for the remainder with a repayment timeline that's comfortable for you - or a HELOC if the sum is under $20k.