“Divorce Monday” is typically when legal separation proceedings skyrocket — but financial pressures may keep more partners together

Lawyers are accustomed to long hours and packed schedules, but one day each year stands out as particularly busy: "Divorce Monday." This unofficial term refers to the first Monday of the new year when divorce filings spike.

“Many couples often see the Christmas period as the final straw in their relationship,” Alberta Tevie, a consultant solicitor at the law firm Richard Nelson, told the Daily Mail (1).

While some couples make it through the festivities, the new year often sparks reflection. For those who’ve endured a tough year, January feels like a fresh start — and for some, that means filing for divorce.

But financial realities are making divorce more complicated than ever. With soaring mortgage interest rates and favourable terms locked in during previous years, separating isn’t always feasible.

The cost of splitting up

Dividing marital home equity can feel especially overwhelming when today’s mortgage rates are much higher than in the past. In 2020, the posted rate for a 5-year fixed mortgage rate was around 4.9%. Today, that rate has climbed significantly to 6.09% (2).

For example: A couple with a $400,000 mortgage at a 5-year fixed rate of 4.9% in 2020 would pay $2,302 in principal and interest each month. If one spouse needs to refinance at the current average rate of 6.09% that payment jumps to $2,715.36 — an 18% increase of $414 monthly.

When one spouse needs to refinance during a divorce buyout, higher interest rates significantly increase housing costs. This is the main factor for why many Canadians struggle with home equity divisions.

To make matters worse, most couples sign their mortgage together, making both parties jointly responsible for 100% of the debt (3) — not just “their half.” Donna Cates, a certified divorce financial analyst, explained that in an email to Forbes that if the spouse staying in the house fails to make a payment, the other is legally obligated to cover the full amount, regardless of their relationship status (4).

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Is there a way around it?

Divorce doesn’t have to mean giving up on homeownership, but navigating the financial fallout can be tricky. Selling the marital home and splitting the proceeds is often the simplest solution. However, it means losing the low-interest mortgage you may have locked in years ago.

Buying a new home after divorce can feel like an uphill climb, especially when transitioning from two incomes to one. To make it work, start by consulting a financial advisor.

They can help you:

• Develop a realistic post-divorce budget
• Rebuild your credit independently from your ex-spouse
• Explore options to strengthen your financial situation

An advisor can also help you consider alternatives like downsizing, renting or even shared living arrangements to buy time and regain stability.

Divorce is undoubtedly a major life change, but with a solid plan, it doesn’t have to derail your path to homeownership or whatever financial goals you may have.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Daily Mail (1); Super Brokers (2); Government of Canada (3); Forbes (4)