Broker Education Series

The Separation Tsunami

Utilizing "Common Debt Reducer" and Actual Repayment policies to navigate complex 2026 buyout scenarios.

Why This Matters Now

In 2026, brokers are the "first responders" for separating households. The biggest hurdle isn't just the emotional fallout—it's the Serviceability Trap.

Major banks often sensitize joint debt at a 3% buffer against a single applicant. This creates "Mortgage Prisoners." Specialist policies like Common Debt Reducer (CDR) are the only way to facilitate many property buyouts.

The Critical Pivot

"If you aren't looking at non-bank CDR policies for your separating clients, you're potentially leaving them stranded in a home they can no longer afford to hold jointly, yet can't afford to buy out individually."

Serviceability Impact Simulator

Compare Major Bank vs. Specialist policy outcomes in real-time.

$70k $120,000 $250k
$300k $700,000 $1.2M

The Logic

Bank: Counts 100% of the $700k debt + 3% buffer.

Specialist (CDR): Counts only 50% ($350k) if the other party is self-sufficient.

Bank Outcome $0
Specialist CDR Outcome $0

Policy Levers: Major vs. Specialist

Serviceability Buffer

The Difference

Majors: Standard 3% buffer on all debts.
Specialist: "Actual Repayments" on existing car/personal loans.

Child Support

The Difference

Majors: Shaded by 20-50% or age-restricted.
Specialist: 100% of CSA-registered income accepted.

Joint Debt (CDR)

The Difference

Majors: 100% of liability against applicant.
Specialist: Apportionment based on ownership %.

Credit History

The Difference

Majors: Zero tolerance for recent arrears.
Specialist: "Life Event" exceptions for divorce arrears.

The Broker Protocol

1

Privacy First

Ensure credit inquiries don't trigger alerts to the other spouse during the sensitive pre-separation phase.

2

Upfront Valuations

Order vals before legal orders are finalized. This is the "fulcrum" of the entire settlement.

3

Self-Sufficiency Audit

Gather proof (payslips, lease) that the departing party can service their share elsewhere to trigger CDR policy.

Ready to Specialized?

Join our next webinar on Family Law Finance & Non-Bank Credit.