15th May 2025

Can You Transfer a Mortgage to a Family Member in the UK?

Introduction

Transferring a mortgage to a family member, legally known as a transfer of equity, is a process some UK homeowners consider when going through life events or planning for the future. While it can be helpful in supporting loved ones or restructuring ownership, the process involves strict lender conditions, legal work, and possible tax implications.

This guide outlines the key considerations, eligibility requirements, and potential alternatives - helping you make an informed decision.

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What Does It Mean to Transfer a Mortgage?

A mortgage transfer means:

• Changing names on the property title (deeds) and mortgage agreement.
• A new party (usually a family member) becoming legally responsible for the mortgage repayments.
• The previous borrower being removed from the mortgage (subject to lender approval).
• Adjusting ownership shares if necessary.

This is not the same as adding someone to a mortgage - where both parties become jointly responsible but the original borrower remains liable.

Can You Transfer a Mortgage to a Family Member in the UK?

Yes, but only under certain conditions. Most UK lenders do not offer a "simple" transfer. They will treat it as a new mortgage application, meaning:

• The new borrower must pass affordability and credit checks.
• Legal and administrative steps are involved.
• Fees and taxes (e.g., Stamp Duty) may apply.
• Lender approval is required - transfers are not guaranteed.

Who Can Receive the Mortgage Transfer?

Common family transfer scenarios include:

• Parents to children.
• Between spouses or civil partners.
• Siblings or extended family members (e.g., nieces/nephews), subject to lender policy.

The recipient must:

• Be aged 18 or over.
• Pass the lender's affordability checks.
• Provide evidence of income and financial stability.
• Have a satisfactory credit history.

Not all lenders allow transfers to extended family members or non-occupants.

Why Do People Transfer a Mortgage?

Common reasons include:

• Divorce or separation: Removing an ex-partner from the mortgage.
• Estate and inheritance planning: Passing property to children during lifetime.
• Helping relatives: Supporting a child or family member onto the property ladder.
• Downsizing or lifestyle changes: Parents transferring ownership as they move out.
• Tax planning: Managing potential Inheritance Tax (IHT) exposure.

Each situation should be carefully reviewed for financial, legal, and tax consequences.

Lender Criteria for Mortgage Transfers

Each lender will have its own rules, but typically require:

• Full affordability assessment and credit checks on the new borrower.
• A property valuation (in many cases).
• Minimum equity (commonly 15% - 25% of the property value).
• Transfer administration fee (typically £100 - £300).
• Repayment history review on the existing mortgage.

Some lenders may restrict transfers to specific family relationships or disallow them altogether.

Legal and Financial Considerations

There are several key implications to understand:

Area	Consideration
Stamp Duty Land Tax (SDLT)	May apply if the transfer involves a payment or outstanding mortgage balance.
Early Repayment Charges (ERCs)	May apply if the mortgage is within a fixed-rate or discount period.
Capital Gains Tax (CGT)	Could apply if the property is not your main residence and is transferred below market value.
Inheritance Tax (IHT)	Transferred equity may be considered a gift and fall under the 7-year gifting rule.
Legal Fees	Solicitors will charge £500 - £1,500+ depending on the case.
Credit Reports	The transfer can impact the credit profiles of both parties.

It is essential both parties obtain independent legal advice to comply with the lender's requirements and prevent future disputes.

Step-by-Step: How to Transfer a Mortgage

1. Contact your lender: Confirm whether they allow transfers and obtain their criteria.
2. Affordability & credit checks: The incoming borrower must provide income and credit documentation.
3. Valuation: The lender may request a current market valuation of the property.
4. Appoint solicitors: Each party will typically require separate legal representation.
5. Legal documentation: Draft and review the deed of transfer, mortgage deed, and any related agreements.
6. New mortgage offer: If approved, the lender will issue revised mortgage terms.
7. Land Registry update: The legal transfer is completed, and ownership is updated.

The process usually takes 4 to 8 weeks and can cost £1,000 to £3,000 in total.

Alternatives to a Full Mortgage Transfer

If a full transfer is not feasible, consider these alternatives:

• Adding a family member to your mortgage: Both parties share liability.
• Gifted deposit: Help your family member buy a home in their own name.
• Joint borrower, sole proprietor mortgage: Common for parents helping children, where the parent supports repayments but does not appear on the title.
• Equity release: For older homeowners wanting to unlock property value.
• Selling the property: The family member buys the home, possibly with your financial support.

Frequently Asked Questions

Can I gift a house with a mortgage?

Yes, but only if the recipient can assume or replace the mortgage with lender consent. Alternatively, the mortgage may need to be repaid in full before the gift can proceed.

Do I need a solicitor?

Yes. Mortgage transfers involve legal ownership changes and require professional conveyancing. Most lenders will not proceed without proof of independent legal advice.

Can I transfer my mortgage to my child?

Yes, in principle - but only if they qualify for a mortgage based on affordability and credit history. They must also be of legal age and accepted by your lender.

Is it better to transfer or remortgage?

It depends on your goals. In some cases, remortgaging jointly to secure a better rate or term may be more cost-effective than a transfer of equity.

Can I transfer a Help to Buy mortgage?

Yes, but you'll need to satisfy both the main mortgage lender and the Help to Buy equity loan administrator (e.g., Homes England). Additional conditions apply.

Final Thoughts

Transferring a mortgage to a family member can be a helpful solution in many scenarios but requires careful planning and professional input. To proceed:

• Speak to your lender about their rules and process.
• Obtain regulated mortgage advice from a qualified adviser.
• Consider tax and legal implications with your solicitor or financial planner.
• Explore alternatives to determine the most suitable option for your needs.

Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.

Need Guidance on Mortgage Transfers?

We recommend speaking to a regulated mortgage adviser for tailored support. If you need help, contact a mortgage professional authorised by the Financial Conduct Authority (FCA) who can guide you through your specific circumstances.

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