Category: Mortgages

University education comes with a hefty price tag in the UK, and it can leave you in considerable debt.

Student loans can run into tens of thousands of pounds, and it’s important to know how they can affect your future, especially when buying a home.

This article explores how student loans can affect mortgage applications and how you can increase your chances of a positive outcome.

Can You Get Mortgages With Student Loans?

Yes. Although it can impact your application, having a student loan doesn’t disqualify you from getting a mortgage.

Responsible mortgage lenders must check student loans alongside other types of debt when assessing whether or not you can afford the mortgage.

However, although they’re technically debts, student loans aren’t looked at in the same light as other types of debts.

Student loans don’t appear on your credit file, so the amount you owe and repay doesn’t show up on any credit record.

Your student loan won’t play into the credit search aspect of your mortgage application and won’t have as much impact as other debts like credit cards or personal loan debts.

With the right guidance from a mortgage advisor or broker, you can access mortgages that best fit your circumstances and finances.

They can provide tailored advice to suit your needs and give you access to lenders most likely to accept your situation.

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How Do Student Loans Affect Mortgage Applications?

Lenders will consider how the student loan affects your affordability when assessing how much money they can lend you through a mortgage.

Some key areas they’ll be interested in include:

Your Monthly Repayments

Lenders need to deduct any existing financial responsibilities from your income to calculate the size of the loan you can afford, including the amount you pay out every month on your student loan.

Lenders want to be sure that what you have left after spending and debt commitments is enough to afford mortgage repayments safely.

Generally, the more you pay monthly toward your student loans, the less you can borrow.

The Outstanding Balance

Lenders will also be interested in how much is left to repay on your student loan to get a full picture of your financial commitments in the long run.

A mortgage is among the most significant commitments you’ll make in your financial life and will likely involve periods of more than 20 years.

Some lenders set minimum acceptable overall debt levels for borrowers, so large student loans can impact their willingness to lend and at what terms.

They must be sure you can cover the cost of the mortgage and the student loan with your earnings.

This can depend on when you took the loan and how much you earn since most student loans are set up so that you only start making repayments after achieving a certain salary threshold.

If you don’t yet earn enough to repay student loans, you don’t have to worry since lenders understand that you’ll only start repaying as your salary increases, meaning it won’t affect your affordability.

What Deposit Amount Is Needed To Get A Mortgage With Student Loans?

Like all mortgage applications, the higher your deposit, the more favourably you’ll be viewed by mortgage lenders.

The deposit required by the mortgage lender will depend on the price of the property you’re buying and whether you’re classed as high or low risk.

Most lenders set the maximum loan-to-value (LTV) ratio at 90%, meaning you’ll need a deposit of 10%.

The LTV shows how much of the property you own outright. Some can accept as little as a 5% deposit, while others will need you to put down more if you’re considered higher risk because of issues like bad credit.

You’ll need adequate income to save and be considered for a mortgage, and student finance is not classed as income.

Although repayments towards student loans can hinder saving for a mortgage deposit, you can consider mortgage options for low-income earners like joint mortgages, guarantor mortgages and government schemes that help first-time buyers.

Mortgage advisors or brokers can help you find the best option for you.

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Should I Disclose My Student Loans On Mortgage Applications?

Yes. Your student debt is an important part of your overall financial situation, even if you’re not making any repayments.

Withholding information in your application can be considered mortgage fraud, and it’s not worth the risk because you can still qualify for a mortgage with student loans.

You’re legally required to be honest and transparent in mortgage applications and give lenders a clear and realistic picture of your finances.

Although the student loan will not appear in your credit file, the repayments can still appear in your PAYE payslip and tax returns, even if you’re self-employed.

It would be difficult for lenders to miss the student loan since they’ll require you to present proof of income to qualify for a mortgage.

What Should Be My Earnings To Get A Mortgage With Student Loans?

Lenders will use multiples of your salary or income to determine how much you can borrow.

Some offer loans four times your annual income, while others offer 4.5 x, 5x, or 6x under the right conditions.

Your income must be sufficient for your desired property, but affordability is the most important factor.

Mortgage lenders assess your debt-to-income ratio to determine your affordability.

They’ll look at your monthly income minus any outgoings, including student loan repayments.

A lower debt-to-income ratio is more attractive because it shows lenders you have more disposable income for mortgage repayments.

Do Student Loans Affect Mortgage Applications? Final Thoughts

Student loans can only affect your mortgage application if they affect your affordability.

They’ll not affect your credit score because they don’t appear on your credit file.

Mortgage advisors with experience arranging mortgages for applicants with student loans can help you find a suitable option to suit your circumstances.

You can also increase your chances by having a healthy deposit and increasing your income to ensure you’re attractive to lenders and can afford to repay the mortgage.

Give Mortgageable a call today at 01925 906 210 or contact us to speak to one of our friendly advisors.

With the steady rise of property prices across the UK over the years, 1 million mortgages are no longer a rarity.

If you’re looking to purchase a large investment property or a home with more space, luxury, extra bedrooms, and gardens, a £1 million mortgage can help you fulfil your dreams.

Here’s everything you need to know about £1 million mortgages and how to get one.

Can You Get A 1 Million Mortgage In The UK?

Yes. Unlike before, when only private lenders offered 1 million mortgages, more and more lenders can provide this level of funding today.

You can access a 1 million mortgage if you meet the eligibility and affordability requirements for this type of lending.

You’ll first need to find a suitable lender who offers £1 million mortgages.

It can be a high street or private mortgage provider, with most borrowers preferring private lenders thanks to their flexibility and better terms.

A private provider is more willing to take on risks and consider you holistically.

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They can tailor the loan to your needs and consider your range of assets and earnings, making it easier to get a better loan-to-value (LTV) ratio.

However, you’ll likely need an introduction to access a private lender who can offer a £1 million mortgage.

High street providers are easier to access and are usually more straightforward.

Although you’ll not get a bespoke level of service like a private lender, mainstream lenders are usually more open, and their acceptance criteria and mortgage process are more transparent.

How To Get A 1 Million Mortgage

You can apply for a £1 million mortgage like any other mortgage.

The following steps can help ensure you’re on the right track:

Step 1: Prepare The Necessary Documents

Having your paperwork ready in advance can help save time, and there may be extra scrutiny on your affordability for a £1 million mortgage.

You’ll likely need documents like proof of income, proof of ID, proof of address, evidence of commissions or bonuses, credit reports, and solicitor details.

Step 2: Ensure Your Credit Report Is Correct and Updated

The status of your credit report can make a difference in the interest rate you get on the £1 million mortgage.

Ensure you get a copy of your credit report and confirm that it’s up to date and free of inaccuracies.

Step 3: Consult A Mortgage Broker

Mortgage brokers specialising in £1 million mortgages can guide you on how to apply and which lenders to approach for high-value deals.

Consulting a broker with experience in this market can help save you time and money.

They can also give you access to lesser-known lenders who offer bespoke deals to borrowers taking out large mortgages.

Income Needed For A 1 Million Mortgage

The income needed to qualify for a 1 million mortgage will depend on your chosen lender.

Most conventional lenders determine the size of the mortgage you’re eligible for based on how much you earn.

They usually base affordability calculations on 4 to 5 times your salary or up to 6 and 7 times in rare cases and may require that you make at least £200,000 yearly for a £1 million mortgage.

They then compare it to your fixed expenses through a stress-testing process and include all your outgoings, from child care to gym memberships.

Getting a mortgage from conventional lenders can be challenging if your income includes foreign income, discretionary bonuses, or irregular earnings.

Private lenders are more flexible and can consider all your income streams, including dividends, pensions and rental income. Some even accept assets like luxury items or cars as collateral.

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Deposit For A 1 Million Mortgage

Most lenders will need substantial down payments for a £1 million mortgage to reduce the risks involved.

Conventional lenders may not be willing to go beyond a 75%-80% LTV, meaning you’ll need a deposit of at least 25% to qualify for a £1 million mortgage.

The best deals usually start with deposits of 40% and above, and only a few lenders can accept a 10% deposit if you have a robust application and minimal risk factors.

Private providers are usually more willing to stretch the LTV and can offer up to 95% LTV for lower-risk borrowers.

You can also get a good deal if they want to build a longer-term relationship with you, and you have a strong prospect of future earnings.

Can I Get An Interest Only 1 Million Mortgage?

Yes. Interest-only £1 million mortgages exist and feature similar restrictions to smaller interest-only mortgages.

You’ll have better chances of an interest-only 1 million mortgage with private providers, and they’ll likely need a higher deposit with LTV ratios that don’t exceed 75%.

An interest-only £1 million mortgage will allow you to make smaller monthly repayments with a large balance being due at the end of the mortgage term.

You’ll need to show the lender a viable repayment strategy that reassures them of your capability to pay off the sizeable principal amount in one payment.

Exit strategies can include equity in other properties, investment portfolios, or selling the property at the end of the term.

1 Million Mortgage For A Buy To Let

Lenders also offer £1 million mortgages for buy-to-let properties, but the terms are usually different than residential mortgages.

You’ll need a larger deposit as buy-to-let properties are considered higher risk.

Lenders may also set minimum income requirements when assessing affordability, but others may decide based on projected rental yields.

You may be required to cover 125-130% of the monthly repayments on your mortgage with the rental income.

Private lenders can be more open to considering additional income like savings, capital from property and pensions.

Researching the area where the buy-to-let property is situated is important because sometimes it can be challenging to generate enough rental income to make the investment feasible.

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£1 Million Mortgages Final Thoughts

If you’re looking for a £1 million mortgage and don’t know where to start, consult a mortgage broker or advisor specialising in arranging such deals.

You’ll benefit from their experience and knowledge, and they can quickly assess your needs and situation to connect you to a suitable lender.

Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.

Flipping homes is an excellent real estate investment strategy where you quickly buy, renovate and resell properties and make a huge profit.

A buy-to-sell mortgage is a suitable financing option if you’re looking to buy a property and sell it for profit, but don’t have the money to cover the costs outright.

Here’s everything you need to know about buy-to-sell mortgages.

What Is A Buy To Sell Mortgage?

A buy-to-sell mortgage is a short-term financing option meant to cover the cost of investing in a property that you expect to sell at a higher value soon after, usually within 12 months.

They’re also called bridging loans and can be arranged more quickly than traditional mortgages, with typical loan periods ranging from 1 to 3 years.

Regular mortgages are not suitable for flipping properties because they usually feature early repayment charges, and the lender may not allow you to sell within six months after purchase.

With a buy-to-sell mortgage, you can repay within months when you sell the property, and interest is calculated monthly instead of yearly.

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Why Choose A Buy To Sell Mortgage?

Buy-to-sell mortgages are suitable for flipping properties for various reasons. They take less time to organise, and you can have the funds you need within days instead of months.

They’re suitable for quick purchases when the timing is a factor, like buying a property at auction.

Buy-to-sell mortgages are also more flexible than standard mortgages and can allow you to repay after a short period.

]Unlike traditional mortgages that include penalties if you repay before the loan term ends, buy-to-sell mortgages are designed for investors who want to sell and repay the loan after a few months.

Buy-to-sell mortgages give you more scope in what you can buy regardless of the property’s condition.

You can only use standard mortgages to buy habitable homes for yourself or your tenants.

Buy-to-sell mortgages allow you to buy uninhabitable homes which may not have working bathrooms or kitchens or are not secure, then renovate them for resale.

Eligibility Criteria

While individual lenders will have criteria for deciding whether to approve or reject your loan application, buy-to-let mortgages can vary from standard mortgages in the following ways:

Deposit

The loan-to-value (LTV) ratio accepted by the lender will determine the amount of deposit you need to put up.

The LTV is usually capped at a lower maximum than standard mortgages at around 75% on average for buy-to-let mortgages.

Some lenders can accept higher LTV depending on your circumstances, and a mortgage broker can help find a suitable deal.

Exit Strategy

In standard mortgages, repayment affordability is usually assessed based on your income from employment or projected rental income.

With buy-to-let mortgages, lenders place more importance on your exit strategy.

It refers to how you intend to repay the loan at the end of the term, which usually involves selling the property after completing renovations.

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Credit History

Although lenders may look into your credit history to see how you handle your finances, it will not have much of an impact on buy-to-sell mortgages like other types of borrowing.

Lenders will mainly focus on whether or not you can raise enough capital to repay the loan from the sale of the property.

Provided the lender is confident in your ability to sell and get enough funds to repay the loan, past late or missed payments will be less relevant.

Loan Period

Most buy-to-sell mortgages feature short repayment periods of up to a year, with some going up to 24 or 36 months.

Being realistic about how long you need to flip the property is vital.

Remember that renovation projects can sometimes take longer than expected, and the last thing you want is to come to the end of the buy-to-let mortgage term before selling and repaying the loan.

Buy To Sell Mortgage Options

There are broad buy-to-sell mortgage options, and the right choice for you will depend on your circumstances and needs.

These include:

Bridging Loans

A bridging loan is suitable if you want to flip a property within a year or sooner.

They feature higher interest rates than mortgages, but you can use them to buy un-mortgageable properties.

You’ll get the funds quicker and don’t need to wait six months before reselling or deal with early repayment penalties.

Refurbishment Finance

Getting a mortgage can be challenging if you want to buy a property that needs upgrading since most lenders don’t approve mortgages for uninhabitable properties.

Properties are considered too risky if they don’t have functional kitchens, bathrooms or security.

A refurbishment loan is more suitable for such cases where the aim is to renovate and resell for profit.

Lenders can offer light or heavy refurbishment products with property value assessed post-refurbishment instead of the current value, allowing you to borrow more than standard mortgages.

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How To Increase Your Chances of Buy To Sell Mortgage Approval

Deposit

The larger the deposit, the more likely you’ll get approved with a good interest rate. Most lenders require a deposit of at least 25% of the property’s value.

Strong Exit Strategy

The more realistic your exit strategy appears, the easier it is to get approval.

If the project involves renovations, the lender will want to see that evidence that the amount you borrow can cover the costs within the specified term

A Good Property

Lenders will be more comfortable approving the loan if the property looks easy to sell.

If it’s already suitable to live in and has no huddles to a smooth sale, such as non-standard construction or leaseholds, it will work in your favour in convincing the lender.

Experience Flipping Properties

Lenders will quickly approve your application if you can show them you’ve previously used buy-to-let mortgages to flip properties successfully.

Buy To Sell Mortgage Final Thoughts

If you’re looking for financing to quickly buy, renovate and sell a property, a buy-to-sell mortgage can provide the financing you need.

To ensure you get the best deal for your situation and needs, consult a mortgage advisor or broker with experience in buy-to-sell mortgages.

Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.

Saving or borrowing enough to purchase a home in the UK can be challenging, with average house prices being almost ten times the average wage.

The good news is it’s no longer unattainable thanks to a seven times income mortgage.

It allows you to borrow seven times your salary to help you purchase properties you thought you couldn’t afford.

Here’s everything you need to know about a seven times income mortgage UK and how you can get one.

Can You Get A 7-Times Income Mortgage?

Yes. Although it’s rare, getting a seven times income mortgage in specific circumstances is possible.

Lenders will use multiples of your salary or income to determine how much you can borrow.

Common amounts include four times your annual income, while others offer 4.5x, 5x, or 6x under the right conditions.

Only a limited number of lenders offer mortgages on a 7x income multiple, and the best way to explore your options is through a mortgage advisor or broker.

They can be a massive help, given how restricted your options can be, and you’ll benefit from their extensive industry knowledge and relationships with lenders.

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Eligibility For 7 Times Income Mortgage

The criteria you get will depend on the lender. Some require the following for you to be eligible:

• You’re a first-time buyer, a home mover or are remortgaging.
• You live in England or Wales.
• You want to buy a property worth £50,000 to £10m.
• You have a deposit of at least 10%.
• You earn at least £25,000 working as a firefighter, paramedic, nurse, police, doctor, teacher, barrister, accountant, dentist, lawyer, engineer, surveyor or architect.

You’ll need to earn at least £75,000 if you don’t work in any of the above jobs, and if you’re taking out a joint mortgage, only one of you will be eligible.

The lender will multiply one income up to 7 times and the remaining one up to 5 times to determine how much you can borrow.

7 Times Income Mortgage With A High Net Worth

People with a high net worth aren’t always restricted to the same lending criteria or regulations as other borrowers.

Mortgage lenders specialising in high net worth agreements are usually willing to offer much higher income multiples, loan amounts and bespoke terms and conditions.

You can borrow up to 7 times your salary through a high net worth mortgage if you have an annual net income of £300,000 or more or assets worth £3 million or more.

High-net-worth mortgages are usually larger and more complex than standard home loans and suitable for high-value properties or investments.

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If your wealth is tied up in assets, you can apply for asset-backed mortgages up to seven times your salary through specialised lenders.

It involves securing the debt against valuable assets like stock portfolios or shares.

Specialised lenders don’t often advertise their services and mostly work through brokers or advisers, so finding the right broker is key to landing a bespoke deal.

Alternatives To 7 Times Income Mortgage

Alternatives to secure the mortgage you need when you want to borrow seven times your income include:

Joint Mortgages

Applying with another person is an excellent way to boost your borrowing power.

Someone else on the application can lift the total income and help you reach your desired borrowing amount.

Some lenders even allow more than two applicants on a mortgage application, with the highest earners determining how much you can borrow as a group.

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Secured Loans

A secured loan is an excellent way to get hold of more financing, including borrowing up to seven times your income.

Usually classified as a second-charge loan, you’ll secure the amount you borrow against a property you own or another high-value asset.

You can get up to 10 times your income with a high-value asset as a security, but you’ll likely get high-interest rates.

The risk is usually lower for the lender because they can repossess the asset you use as security and resell it to recover the outstanding balance if you default.

Ensure you only borrow what you can realistically afford to repay with secured loans.

Equity Release and Remortgaging

You can also consider releasing the equity held up in your house through a lifetime mortgage if you’re over 55 years and want a seven times income mortgage.

It can help you access extra funds and make a higher borrowing limit more realistic.

With such equity releases, repayments don’t have to be made until you either go into long-term care or die.

Remortgaging an existing home, you own partially or outright can help increase your buying power for an additional property.

It can provide extra capital to boost your deposit and allow you to access a bigger mortgage close to 7 times your income if you approach the right lender.

Supplemental Income

If you have a complex income or get funds through different sources, it can help improve your position with lenders and help you borrow more.

Some lenders consider all income sources, and you can incorporate your commissions, bonuses, overtime, investments or pensions to increase your borrowing power.

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Factors That Can Impact Eligibility For 7 Times Income Mortgage

If you’re not a high net worth borrower, the following factors can affect your chances of qualifying for a seven times income mortgage or borrowing such amounts:

Expenditures

Even with a large salary, the amount you spend on your outgoing costs can play a role in influencing lenders.

Excessive spending can disqualify you or result in high rates.

Deposit

The deposit size impacts the loan-to-value (LTV) ratio, and a large deposit can make your application more attractive to lenders.

Credit History

Lenders get a snapshot of how you handle your debts and overall finances through your credit rating.

You can get the best rates with a good rating, but even with bad credit, you can access specialised lenders who offer bad credit mortgages.

7 Times Income Mortgage UK Final Thoughts

A 7 times income mortgage is an excellent way to buy the house you want.

Consider approaching a mortgage advisor or broker with experience arranging such mortgages to help explore whether you qualify and increase your chances of approval.

Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.

Furlough leave refers to a mandatory temporary leave of absence or modification of work hours without pay or with reduced income for a specified period.

If you’re among the many workers in the UK who have been on furlough leave, you may be wondering how it can affect your chances for a mortgage.

Read on to learn more about getting a mortgage after furlough leave.

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Can You Get A Mortgage After Furlough Leave?

Yes. Although your choices may be limited, being on furlough leave doesn’t disqualify you from getting a mortgage.

Mortgage decisions are made on many different factors, and being furloughed is only one of them.

If you just returned to work and are back on your original employment status or contract and can prove income and affordability, you can easily get a mortgage.

Your mortgage application may not be affected, provided you meet the lender’s criteria, but not all lenders are the same, and some may be more flexible than others.

Each provider uses their criteria, and you can find excellent deals with standard terms similar to borrowers who were not on furlough leave.

Your situation can influence the lender’s willingness and the rates you get, so it’s wise to consult a mortgage advisor or broker with access to the whole market and experience arranging mortgages after furlough leaves.

The broker can connect you to lenders who can give you an excellent deal based on your situation.

How Does A Furlough Leave Affect Mortgage Eligibility?

Ways in which a furlough leave can affect your mortgage eligibility include your job security, income and affordability.

Lenders want to be sure you can afford the mortgage and continue affording it for the foreseeable future.

Since your income will have reduced during furlough leave, it may have impacted your debt-to-income ratio, which can significantly impact an application.

There may also be uncertainties about whether you’ll go back to full-time employment with your previous income and contract terms.

Furloughs are often used when there isn’t enough work or cash for payroll, and this can also cause layoffs where employers cut jobs and release employees.

Ensure you document your job security, like having a written confirmation from your employer to help with your application and give lenders confidence in your income and ability to repay on time.

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How Can I Get A Good Rate On A Mortgage After Furlough Leave?

One of the best ways to get a low rate on a mortgage after furlough leave is by saving up a high deposit.

Higher deposits can help reduce your loan-to-value (LTV) ratio and give you access to more lenders with excellent rates.

The LTV is the size of your mortgage expressed as a percentage of your property’s value.

Lenders consider LTV bands when making their decision, and it will impact the deal you get.

A larger deposit means a lower LTV, increasing your chances of getting favourable rates from more lenders as they consider the mortgage a lower risk.

Other factors that can impact the rates you get include your credit history and loan period.

Should I Apply for A Mortgage After Furlough Leave or During Furlough?

It’s better to apply for a mortgage after furlough leave than during the leave period, especially if your income has taken a hit.

Furlough leaves usually involve reduced income, which can go back to the initial amount after the furlough period and help with your mortgage application.

However, if you can show the lender that your employment and income are secure and you’ll return to your normal income after leave, you don’t have to wait to apply for a mortgage after furlough leave.

A document or letter from your employer about your return to work can greatly help.

Your chances of approval will depend on the lender, as some may only consider your furlough income instead of your full salary.

A mortgage advisor or broker with full market access can help connect you to lenders willing to consider your full salary during furlough leave.

Can I Remortgage After Furlough Leave?

Yes. Your furlough leave will not impact you if you’re remortgaging onto another product with your existing lender.

It’s usually referred to as a product transfer, and you can do this over the phone or online.

Product transfers don’t usually have affordability assessments, so a furlough leave will not make a difference.

However, the furlough leave can impact the application if you want to extend your borrowing as part of the remortgage.

The lender will assess your affordability, and the reduced income can affect how much you can borrow.

Remortgaging to a new lender can also be problematic if your income changes during or after furlough leave.

If your total income has been reduced, the amount you can borrow will also reduce, and you’ll likely get strict terms with a new lender.

In such cases, extending the term of your mortgage with the current lender may be a better option to maintain affordability.

What Happens if I Got Approved For A Mortgage Before Furlough Leave?

If you got approved for a mortgage before going on furlough leave, the application outcome will depend on your situation after the leave.

Some lenders may insist that you make another application based on your current salary, while others may continue with the original terms of the deal provided you can prove affordability.

Your overall application may be assessed further, and the lender will want to determine whether you’ve returned to work and at what salary.

They’ll need confirmation that you can afford loan repayments in the long term with your current income.

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Documents Needed To Apply for A Mortgage After Furlough Leave

You can speed up the process by preparing necessary documentation like:

• Utility bills from the past 3 to 6 months
• P60 form from your employer
• Payslips from the last three months
• A driving license or passport
• Bank statements from the last 3 to 6 months

Mortgage After Furlough Leave Final Thoughts

Being on furlough leave doesn’t mean your hopes of climbing the property ladder are over.

You can qualify for a mortgage after furlough leave and get attractive terms and rates provided you can prove affordability.

A mortgage advisor or broker can help you get the best deals and provide expertise on increasing your chances of approval.

Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.

If you’re a homeowner, your home is likely one of your most significant assets and a rich source of cash.

The equity you have in the property, or the portion you own outright, increases over time as you make mortgage repayments and if the value of your home rises.

You can borrow against the equity built up in your home and use the funds however you like, including buying a second property.

Here’s everything you need to know about buying a second property using equity.

Releasing Equity To Buy A Second Property

If you own your property outright, you can unlock the equity by borrowing against your home in what is known as an unencumbered mortgage.

You can use the capital as a deposit for your new property or buy it outright if you’ve already saved up a hefty amount over the years.

If you still have a mortgage, you can do this by remortgaging and accessing a sum more significant than the amount required to pay off your current loan.

Applying for a remortgage is similar to applying for any mortgage.

You’ll need to convince the lender you can afford to repay the refinanced mortgage and the debt secured against the new property.

The remortgage and second mortgage application can be with the same lender or two different lenders.

If you’re over 55 years and have repaid your mortgage or have some outstanding mortgage, you can use an equity release plan to access the money tied up in the property.

Unlike conventional loans, it involves repaying the money when the property is sold, usually following a move into care or death.

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How Much Equity Do You Have?

The first step towards buying a second property using equity is determining how much money you have invested in your existing home.

The level of equity you have equals the valuation of your property minus any current mortgage.

Most mortgage lenders determine how much money they can lend you based on your loan-to-value (LTV) ratio.

The LTV is the mortgage balance secured against your home and is expressed as a percentage of the property’s value.

For example, if your home is worth £100,000 and your outstanding mortgage is £75,000, your LTV ratio is 75%. Your LTV will impact the deal you get on your remortgage.

Lenders generally offer better deals to applicants with lower LTV because they offer more security, and you can get low-interest rates and more affordable monthly repayments.

What Property Are You Buying?

The property type you’re planning to buy using equity and what you plan to use it for will be essential factors when negotiating with the lender.

You can purchase various property types with funds from your equity, and lenders will determine which one you qualify for based on your affordability.

The main ones include:

• Buy to let, where you buy a different property and rent it out to tenants.
• Holiday lets, where you buy a property and rent it to people for holidays or on a short-term basis.
• Second homes or holiday homes, where you buy a second property and use it in addition to your second home.
• Commercial property, where you buy a property for use as a business, like an office or shop.

Lenders will also be interested in the building type.

Most mortgage providers prefer properties constructed with bricks and mortar and consider anything else as non-standard construction.

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What Are Your Circumstances?

Your income, employment situation, and credit profile will impact the deals you qualify for and the mortgage products available to you when buying a second property using equity.

Income

When taking out a new mortgage or remortgage to buy a second property, your earnings determine your affordability.

You’ll likely have a larger mortgage than the existing one, and you’ll need to show the lender you can afford repayments on the two loans.

Most lender cap how much you can borrow at 4.5 times your income, but under the right circumstances, you can find providers who stretch to 5 or 6 times.

If you earn a low income, there are low-income mortgages from specialised lenders who allow you to use supplemental sources like assets and benefits in addition to your salary to increase your borrowing potential.

Employment

While most lenders prefer borrowers in full-time employment, others specialise in self-employed borrowers and contractor agreements.

The main difference is how the income is assessed and how you’ll need to evidence it.

Instead of payslips or pay stubs, the mortgage lender will look at your bank statements, tax returns or profit and loss statements if you’re not formally employed.

Credit Profile

Today many specialised mortgage lenders help people with credit issues remortgage to buy a second property.

Unlike traditional lenders who reject your application if you have bad credit, specialist lenders are happy to consider your situation and offer tailored deals.

Can You Use Equity From An Inherited Home To Buy A Second Property?

Yes. You can easily release equity from an inherited home provided probate, or the legal process that gives recognition to a will, has taken place, and you have become the legal owner of the property.

Most lenders require you to have owned the property for at least 6 to 12 months, but others can remortgage sooner.

If there are other owners or beneficiaries of the inherited property, they’ll need to be on the mortgage, or you can buy their share of the property as part of the remortgage.

Using Equity To Move

You can move to a new home without selling your property through a let-to-buy mortgage.

It allows you to let your current property to tenants and raise funds to put down a deposit or buy a new home.

You can even ask your lender to port your mortgage, where you transfer the deal to the new property, if you have a reasonable rate on the current mortgage.

Check Today's Best Rates >

How To Buy A Second Property Using Equity  Final thoughts

If you’re considering buying a second property using equity, it’s best to consult a mortgage advisor with experience arranging such deals.

They can help you find the best deal for remortgaging and purchasing your new property while providing personalised advice and guidance based on your circumstances.

Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.

How have mortgage interest rates changed over time in the UK? Here we explore the historical timeline in more detail. 

Over the years and previous decades, mortgage interest rates have changed in accordance with the Bank of England base rate.

Below we explore the trends and factors that impacted them and how things may look in the future.

PS, Please refer to our mortgage interest forecasting for the next 5 years here.

Mortgage Rate History UK

The infographic below shows the mortgage rate history in the UK over the last 25 years and includes the highest and lowest average annual interest rates recorded during that timeframe.

 

Check out this table from 2000 to 2024 on changes in mortgage rates:

Year	2-Year Fixed	3-Year Fixed	5-Year Fixed	10-Year Fixed	2-Year Variable
2000	6.50%	6.20%	6.00%	6.50%	6.30%
2001	5.80%	5.60%	5.50%	5.90%	5.70%
2002	5.20%	5.00%	5.00%	5.30%	5.10%
2003	4.80%	4.60%	4.50%	4.90%	4.60%
2004	4.50%	4.30%	4.30%	4.60%	4.20%
2005	4.40%	4.20%	4.20%	4.40%	4.10%
2006	4.60%	4.40%	4.40%	4.60%	4.30%
2007	5.00%	4.80%	4.80%	5.00%	4.70%
2008	6.00%	5.80%	5.70%	6.00%	5.60%
2009	4.00%	3.80%	3.70%	4.00%	3.60%
2010	3.50%	3.30%	3.30%	3.60%	3.20%
2011	3.80%	3.60%	3.50%	3.90%	3.40%
2012	3.60%	3.40%	3.40%	3.70%	3.20%
2013	3.50%	3.30%	3.30%	3.60%	3.10%
2014	3.40%	3.20%	3.20%	3.50%	3.00%
2015	3.20%	3.00%	3.00%	3.30%	2.80%
2016	3.10%	2.90%	2.80%	3.20%	2.60%
2017	3.00%	2.80%	2.70%	3.10%	2.50%
2018	2.90%	2.70%	2.60%	3.00%	2.40%
2019	2.80%	2.60%	2.50%	2.90%	2.30%
2020	2.70%	2.50%	2.40%	2.80%	2.20%
2021	2.60%	2.40%	2.30%	2.70%	2.10%
2022	3.50%	3.30%	3.20%	3.60%	3.10%
2023	3.50%	4.80%	4.70%	5.10%	4.60%
2024	4.70%	4.50%	4.40%	4.80%	4.30%

Table data source: Statistica

Average historical mortgage rate UK

From 1995 until 2022, the average mortgage interest rate in the UK averaged 5.62%.

When were mortgage rates at their highest?

In the last 25 years, the average mortgage interest rate peaked at 8.87 per cent in September of 1998.

When were mortgage rates at their lowest?

In the last 25 years, the average mortgage interest rate was at its lowest in September 2021, at which point it was 3.59 per cent.

Who is affected by mortgage interest rate increases and changes?

It’s important to be aware that in the short term changes in mortgage interest rates don’t impact current mortgage borrowers since the majority are on a fixed term mortgage.

In fact, around 75% of mortgage borrowers are on a fixed term mortgage and in 2019 over 90% of new mortgage borrowers opted for a fixed term mortgage.

A fixed-rate mortgage is a mortgage with a specific interest rate locked in for a certain duration e.g. 2, 4 or 10 years.

Therefore, the majority of people i.e. those on a fixed-rate mortgage will see no change in their mortgage payments in the short term.

What about those on variable-rate mortgages?

Those who are most vulnerable to changes to the interest rates are the over 850,000 individuals on a variable-rate mortgage.

In practical terms, UK Finance estimates that a rise in the Bank Rate of 0.15 percentage points will lead to an average increase in repayments by £15.45 per month.

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What determines the mortgage interest rates?

Although your actual mortgage rate will be determined by factors like the product you choose and your particular lender, the Bank of England’s base rate also has a major impact on mortgage interest rates.

The base rate doesn’t just impact mortgages, but a wide range of financial products, as well as the value of the pound itself.

The Bank of England review the base rate on the first Thursday of every month and it may be changed depending on the rate of spending in the economy.

For example, if spending is deemed to be too low, the base rate will be decreased and if it’s too high, it will be reduced.

Bank of England base rate 1979-2023

	Bank rate at year-end (%)*
1979	17
1980	14
1981	14.375
1982	10
1983	9.0625
1984	9.5
1985	11.375
1986	10.875
1987	8.375
1988	12.875
1989	14.875
1990	13.875
1991	10.375
1992	6.875
1993	5.375
1994	6.125
1995	6.375
1996	5.9375
1997	7.25
1998	6.25
1999	5.5
2000	6
2001	4
2002	4
2003	3.75
2004	4.75
2005	4.5
2006	5
2007	5.5
2008	2
2009	0.5
2010	0.5
2011	0.5
2012	0.5
2013	0.5
2014	0.5
2015	0.5
2016	0.25
2017	0.5
2018	0.75
2020	0.25
2020	0.10
2021	0.25
2022	0.5
2022	0.75
2023	5.0

 

Source: Bank of England Official Bank Rate History

What is the current mortgage interest rate?

As of December 2022, the Bank of England base rate stands at 3.5%.

According to Trading Economics’ latest data, the average mortgage rate was 5.88% as of December 2022.

However, as mentioned this is an average and the exact rate offered to you will depend on a range of factors including your credit score, the mortgage lender, type of mortgage etc.

According to Trussle, at present, the average cost of two- and five-year fixed-rate deals across all deposit levels stands at 5.37% and 4.84% respectively.

Why are mortgage rates increasing?

The Bank of England increased the base rate in order to “cool” the economy and control surging inflation.

In October, the Consumer Prices Index (CPI) measure of inflation rose to a heady 11.1% in the 12 months to October, in direct conflict with government targets of 2% inflation.

Unfortunately, if inflation does not start to fall, the Bank of England could decide to continue to increase rates into the new year.

The cost of energy is another major contributor to surging inflation, but thanks to the UK government’s Energy Price Guarantee this has been tempered to a large degree.

Recommended guides: 

• Remortgage for home improvements.
• How long does mortgage approval take?
• Remortgage with bad credit.
• Remortgage for help to buy.

What does this mean for you?

With interest rates changing regularly, there is a lot of volatility in the market at present with mortgage deals being constantly updated to reflect the rapid pace of change.

With this in mind, it’s now unarguably more true than ever that you should contact a mortgage broker for help and advice.

A mortgage broker or advisor can hold your hand through the entire process, from initial searches to dealing with the legal stuff, to ensure the process is as smooth as possible.

Call us today on 01925 906 210 or contact us. One of our advisors can talk you through all of your options.

How have mortgage interest rates changed over time in the UK? Here we explore the historical timeline in more detail. 

Over the years and previous decades, mortgage interest rates have changed in accordance with the Bank of England base rate.

Below we explore the trends and factors that impacted them and how things may look in the future.

PS Please refer to our mortgage interest forecasting for the next 5 years here.

Average Mortgage Interest Rate UK 25 Years

The table below shows the average mortgage interest rates for various types of mortgages in the UK from 2000 to the current year.

Year	2-Year Fixed Rate	3-Year Fixed Rate	5-Year Fixed Rate	10-Year Fixed Rate	2-Year Variable Rate
2000	6.5%	6.2%	6.0%	6.5%	6.3%
2001	5.8%	5.6%	5.5%	5.9%	5.7%
2002	5.2%	5.0%	5.0%	5.3%	5.1%
2003	4.8%	4.6%	4.5%	4.9%	4.6%
2004	4.5%	4.3%	4.3%	4.6%	4.2%
2005	4.4%	4.2%	4.2%	4.4%	4.1%
2006	4.6%	4.4%	4.4%	4.6%	4.3%
2007	5.0%	4.8%	4.8%	5.0%	4.7%
2008	6.0%	5.8%	5.7%	6.0%	5.6%
2009	4.0%	3.8%	3.7%	4.0%	3.6%
2010	3.5%	3.3%	3.3%	3.6%	3.2%
2011	3.8%	3.6%	3.5%	3.9%	3.4%
2012	3.6%	3.4%	3.4%	3.7%	3.2%
2013	3.5%	3.3%	3.3%	3.6%	3.1%
2014	3.4%	3.2%	3.2%	3.5%	3.0%
2015	3.2%	3.0%	3.0%	3.3%	2.8%
2016	3.1%	2.9%	2.8%	3.2%	2.6%
2017	3.0%	2.8%	2.7%	3.1%	2.5%
2018	2.9%	2.7%	2.6%	3.0%	2.4%
2019	2.8%	2.6%	2.5%	2.9%	2.3%
2020	2.7%	2.5%	2.4%	2.8%	2.2%
2021	2.6%	2.4%	2.3%	2.7%	2.1%
2022	3.5%	3.3%	3.2%	3.6%	3.1%
2023	5.0%	4.8%	4.7%	5.1%	4.6%
2024	4.7%	4.5%	4.4%	4.8%	4.3%

 

Table data source: Statistica. 

Average historical mortgage rate in the UK

From 1995 until 2022, the average mortgage interest rate in the UK averaged 5.62%.

When were mortgage rates at their highest?

In the last 25 years, the average mortgage interest rate peaked at 8.87 per cent in September 1998.

When were mortgage rates at their lowest?

In the last 25 years, the average mortgage interest rate was at its lowest in September 2021, at which point it was 3.59 per cent.

Who is affected by mortgage interest rate increases and changes?

It’s important to be aware that in the short term changes in mortgage interest rates don’t impact current mortgage borrowers since the majority are on a fixed term mortgage.

In fact, around 75% of mortgage borrowers are on a fixed term mortgage and in 2019 over 90% of new mortgage borrowers opted for a fixed term mortgage.

A fixed-rate mortgage is a mortgage with a specific interest rate locked in for a certain duration e.g. 2, 4 or 10 years.

Therefore, the majority of people i.e. those on a fixed-rate mortgage will see no change in their mortgage payments in the short term.

What about those on variable-rate mortgages?

Those who are most vulnerable to changes to the interest rates are the over 850,000 individuals on a variable-rate mortgage.

In practical terms, UK Finance estimates that a rise in the Bank Rate of 0.15 percentage points will lead to an average increase in repayments by £15.45 per month.

What determines the mortgage interest rates?

Although your actual mortgage rate will be determined by factors like the product you choose and your particular lender, the Bank of England’s base rate also has a major impact to mortgage interest rates.

The base rate doesn’t just impact mortgages, but a wide range of financial products, as well as the value of the pound itself.

The Bank of England review the base rate on the first Thursday of every month and may be changed depending on the rate of spending in the economy.

For example, if spending is deemed to be too low, the base rate will be decreased and if it’s too high, it will be reduced.

Bank of England base rate 1979-2023

 

	Bank rate at year-end (%)*
1979	17
1980	14
1981	14.375
1982	10
1983	9.0625
1984	9.5
1985	11.375
1986	10.875
1987	8.375
1988	12.875
1989	14.875
1990	13.875
1991	10.375
1992	6.875
1993	5.375
1994	6.125
1995	6.375
1996	5.9375
1997	7.25
1998	6.25
1999	5.5
2000	6
2001	4
2002	4
2003	3.75
2004	4.75
2005	4.5
2006	5
2007	5.5
2008	2
2009	0.5
2010	0.5
2011	0.5
2012	0.5
2013	0.5
2014	0.5
2015	0.5
2016	0.25
2017	0.5
2018	0.75
2020	0.25
2020	0.10
2021	0.25
2022	0.5
2022	0.75
2023	5.0

 

Source: Bank of England Official Bank Rate History

What is the current mortgage interest rate?

As of June 2024, the Bank of England base rate stands at 5.25%.

According to Statista’s latest data, the average mortgage rate was 4.7% as of January 2024.

However, as mentioned this is an average and the exact rate offered to you will depend on a range of factors including your credit score, the mortgage lender, type of mortgage etc.

According to Trussle, at present, the average cost of two- and five-year fixed-rate deals across all deposit levels stands at 5.37% and 4.84% respectively.

Why are mortgage rates increasing?

The Bank of England increased the base rate to “cool” the economy and control surging inflation.

In October, the Consumer Prices Index (CPI) measure of inflation rose to a heady 11.1% in the 12 months to October, in direct conflict with government targets of 2% inflation.

Unfortunately, if inflation does not start to fall, the Bank of England could decide to continue to increase rates into the new year.

The cost of energy is another major contributor to surging inflation, but thanks to the UK government’s Energy Price Guarantee this has been tempered to a large degree.

Recommended guides: 

• Remortgage for home improvements.
• How long does mortgage approval take?
• Remortgage with bad credit.
• Remortgage for help to buy.

What does this mean for you?

With interest rates changing regularly, there is a lot of volatility in the market at present with mortgage deals being constantly updated to reflect the rapid pace of change.

With this in mind, it’s now unarguably more true than ever that you should contact a mortgage broker for help and advice.

A mortgage broker or advisor can hold your hand through the entire process, from initial searches to dealing with the legal stuff, to ensure the process is as smooth as possible.

Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.

If you’re planning to move or buy a new home and don’t want to lose your current mortgage deal, you can transfer it through a process known as porting.

It can make things easier and save you money, but you can miss out on better deals available on the market.

Read on to learn what porting a mortgage is, how it works and whether it’s the right option for you.

What does porting a mortgage mean?

Porting a mortgage involves transferring your existing mortgage to a different property and maintaining the same deal terms, like the mortgage period and interest rate.

You’ll likely sell your home when moving, and the proceeds can go towards paying off the existing mortgage.

You’ll then resume the mortgage on your new home with the same lender, rates, and terms.

Check Today's Best Rates >

Reasons for porting a mortgage

Porting is an easy option because you don’t have to do much research on new lenders, product deals, and rates.

You’ll not complete lots of paperwork since the lender already has your information on hand.

It can also save you money if you believe you’re on the best rates available on the market and don’t want to give that up.

It provides consistency if you feel the conditions and terms of the current agreement are perfect for your needs.

It’s a useful option if you have some time left on your current mortgage deal or are locked in a fixed-rate deal and don’t want to pay hefty early repayment charges (ERC).

How does porting a mortgage work?

You must reapply for the deal when porting a mortgage.

Things that can affect your eligibility for the agreement include the new property’s loan to value (LTV), changes in your circumstances since your first mortgage application, and changes in the lending criteria.

The lender will conduct affordability checks and check your credit, so there’s no guarantee that they’ll accept your application again.

The lender will mainly consider whether you can repay the mortgage and their position in terms of risk. If there’s more risk involved, like a higher LTV, they’ll likely not approve you for the same deal.

The lender will also conduct a valuation and survey of the property you plan before making a final decision.

Process of porting a mortgage

You can transfer your mortgage to a new property through the following steps:

Step 1: Determine whether your mortgage is portable

Not every mortgage is portable, so contact your lender or check the terms to determine whether it’s an option for you.

Avoid informing the lender you want to port your mortgage at this point, as you want to ensure it’s the best option for your situation.

Step 2: Determine the overall cost of not porting

Ask the lender if early repayment charges will apply if you sell your house with the fixed rate still in place.

It helps you determine the overall cost of whatever option you choose and see which is better.

Step 3: Consult a mortgage broker or advisor

It’s wise to check whether porting is in your best interests before proceeding, and you can do this by consulting a broker or advisor with experience dealing with porting mortgages.

They have access to the entire market and can check whether sticking with the current mortgage is the best option to ensure you don’t miss out on more suitable terms and better interest rates with a different lender.

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• Mortgage deposit gifts
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• Can you build on the green belt?
• Shortest term mortgage in the UK
• Buying a warehouse in the UK
• Porting a mortgage explained
• Transferring a mortgage

Disadvantages of porting a mortgage

• The main downside is you can miss out on better rates and more favourable terms elsewhere by sticking to your existing deal and lender. If other deals are significantly better, you can consider remortgaging instead of mortgage porting.
• You still have to deal with other fees in porting, including valuation, legal, arrangement, and possibly a transfer fee.
• If the property you’re eyeing is more expensive, you may need to borrow additional money, which can be at a different rate, resulting in two products or mortgages with varying terms and end dates.

Factors that can affect your ability to port a mortgage

The following factors can determine whether you can or should port your mortgage:

Property type

Unusual properties have a limited market, and most lenders consider them a higher risk. If you default and the lender has to repossess, they’ll find it harder to sell than other properties.

Such unique properties can include houses with timber frames, high-rise flats, listed buildings, new builds, non-standard construction, and uninhabitable property.

Most high-end lenders will reject porting a mortgage for the unusual property. However, some specialist lenders can ask for more significant deposits in such cases to offset the risk, so you’re not entirely out of options.

Changed circumstances

The available options can differ if your employment, income, and personal circumstances have changed since you last applied for a mortgage.

You may quickly get more favourable terms and deals if your income and credit have improved, making it an excellent idea to shop around or use a broker to determine the best deal you can qualify for.

However, if you’ve been facing credit problems, your score has taken a hit, or your income has reduced, porting your mortgage might not be the best idea as you’ll likely not meet the lender’s requirements.

Check Today's Best Rates >

The cost of the property you’re buying

If you’re porting your mortgage to a more expensive property, you’ll likely need extra borrowing if you don’t have the capital to make up the difference.

Additional borrowing is often done on a new mortgage product, meaning you’ll be dealing with two mortgages simultaneously.

Porting to a cheaper property is more straightforward because you’re not borrowing more money.

However, if the property’s value is lower is going down, the loan-to-value (LTV) ratio will likely increase, and the lender can block the move as it puts them at greater risk.

Further reading: 

• How much does the average mortgage cost?
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Porting A Mortgage Explained Final thoughts

Porting a mortgage is an option to consider if you’re planning to move to a new house and want to maintain your current terms, rates, and lender.

However, it’s not always the best option, so consult a mortgage broker or advisor with experience in mortgage porting so they can help you make the best decision based on your situation.

Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.

Need more help? Check our quick help guides: 

• Reasons why a mortgage could be declined on affordability. 
• How reliable is a mortgage in principle?
• How do joint mortgages work?
• Can you get a mortgage on a fixed-term contract?

How does transferring mortgages work? Here we explain the intricacies in simple terms and explain how the whole process works. 

When circumstances in your life change and properties or mortgages are concerned, mortgage transfers may be necessary.

Such situations can include a divorce or the death of a loved one, and the transfer can occur when remortgaging or during a current mortgage term.

Here is everything you need to know about transferring mortgages.

What does transferring mortgages mean?

Mortgage transfers involve transferring an existing home loan to someone else and can refer to adding, removing, or replacing someone else on an existing mortgage.

The process is like a transfer of equity, allowing someone else to take responsibility for the home, mortgage terms, rates, and lender’s charge without getting a new mortgage.

Common examples of mortgage transfers include:

• Turning sole mortgages into joint mortgages

When two people get married or move in together, it’s common to transfer equity.

It involves the original owner splitting the shares they own in the property with their partner by adding their name to the title deeds.

• Turning joint mortgages into sole mortgages

A mortgage transfer can occur when a couple separates or simply wants a sole mortgage instead of a joint one.

One person may leave home, and the one who remains on the property can buy out the other and take sole responsibility for the mortgage.

• Giving shared ownership to a family member

Commonly known as a gifted equity transfer, it involves passing a share of the ownership to someone else without money changing hands.

It often occurs among family members, like a parent adding a child to the property deeds or siblings adding each other.

• Transferring the property to a family member

Transferring whole mortgages to family members often occurs for inheritance tax purposes and as part of long-term estate planning, where the property passes on to someone else.

The person taking responsibility for the mortgage must satisfy the lender’s eligibility and affordability assessments.

Some lenders are more willing to transfer mortgages or equity than others, so it’s wise to consult a mortgage broker or advisor who can give you a more tailored solution based on your circumstances.

Need more help? Check our quick help guides: 

• Reasons why a mortgage could be declined on affordability. 
• How reliable is a mortgage in principle?
• How do joint mortgages work?
• Can you get a mortgage on a fixed-term contract?

How do you transfer a mortgage to someone else?

Mortgage transfers are usually more straightforward than property purchases, but there’s a lot of legal involved.

It mainly consists in completing a TR1 Land Registry form which details the name of the current owner or transferor and the new owner or transferee.

Before transferring a mortgage to someone else, you’ll need to get consent from your existing mortgage lender and obtain copies of the contractual mortgage agreements and the property title deeds.

Lenders often conduct eligibility assessments to confirm the new owner fulfils their requirements before they become equally liable for the mortgage.

Once the lender confirms the new arrangement can fulfil the terms of the agreement, they’ll initiate a remortgage with the addition of the new party and removal of anyone leaving the deeds to relieve their obligations.

Check Today's Best Rates >

What is the process of transferring mortgages?

There are several steps involved in transferring mortgages or equity:

Step 1: Apply for a new mortgage or remortgage

Since the property’s ownership is changing, a new agreement is necessary.

You can make one with an existing lender through a remortgage or get into a new mortgage with a different lender.

Shopping for a new lender can give you access to more competitive rates and better deals, but more formalities and paperwork are involved and will likely take longer.

Step 2: Find a conveyancer

You need a conveyancer to take care of the legal process of ownership transfer. They’re usually lawyers who specialise in the legal aspects of transferring property ownership from one person to another and can help you deal with the paperwork.

If someone leaves the mortgage, separated legal representation may be necessary, but if you add someone to the deeds, the conveyancer can represent both parties.

Step 3: Identity verification

The parties involved must present identity documents like an ID or driving license to verify who they are.

Conveyancers may also need to verify the source of the funds if you’re buying someone out of the mortgage while facilitating the transfer. They’ll then get the mortgage transfer in motion.

Step 4: Completion

The lawyer will obtain the mortgage deed for all parties to sign and arrange fund transfers, if any.

If someone is leaving the mortgage, they’ll need to fill out and sign an ID1 form in the presence of a witness.

After the process is complete, the conveyancer will provide the land registry with the new property ownership details.

They’ll also calculate any stamp duty that must be paid to the HMRC and arrange for a transfer for the same.

What is the cost of transferring mortgages?

The amount you spend when transferring a mortgage will vary depending on your situation. Standard costs to expect include:

Lender fees

The mortgage lender can include some fees to cover the administrative costs involved with the change.

You may also be liable to an early settlement charge or penalty depending on the terms of your existing agreement.

Check Today's Best Rates >

Legal fees

Legal costs can vary depending on the property’s value and whether the transfer involves a new mortgage or remortgage. You may also pay to obtain the property’s title and register the land registry change.

Stamp duty

Stamp duty land tax can be the most significant cost associated with transferring mortgages, and you can be liable if the transfer involves a mortgage or equity of £125,000 or higher.

The fees are payable when transferring property ownership in situations other than civil partnership dissolutions or divorces.

Are there checks involved in transferring mortgages?

Yes. The lender must assess the suitability of all parties, including income, credit history and affordability, to ensure they meet eligibility and affordability requirements.

Those taking full or partial ownership must be capable of keeping up with mortgage repayments under the new terms.

Related guides: 

• When was my house built? 
• Buying out a sibling from an inherited house 
• How long does it take to release mortgage funds? 
• Does a valuation mean that a mortgage is approved? 
• Mortgage lenders that accept benefits 
• Can I extend my interest-only mortgage term? 

Transferring Mortgages Final thoughts

Whether you’re looking to add, remove or replace someone else on an existing mortgage, ensure you consult a mortgage broker or advisor for personalised guidance on transferring mortgages based on your situation and needs.

With their extensive market access and expertise, brokers can help you get the best deal and suitable lenders for your changing circumstances.

Call us today on 01925 906 210 or contact us. One of our advisors can talk through all of your options with you.

Recommended reading for mortgage hunters: 

• Mortgage deposit gifts
• How much does a mortgage broker cost?
• Can you build on the green belt?
• Shortest term mortgage in the UK
• Buying a warehouse in the UK
• Porting a mortgage explained