Last reviewed on 12th July 2023 by Martin Alexander (Mortgage Advisor)

Circumstances in life often change, and when a mortgage or property is concerned, it may involve having to transfer a mortgage. Transferring a mortgage can include adding, removing or replacing a person on a mortgage. A transfer can take place during an existing mortgage term or during a remortgage.

The process of a mortgage transfer may seem complex, but with the right support and expertise, it can be straightforward. While many situations may warrant a transfer, this guide aims to cover each scenario. You can also make an enquiry to speak to an expert.

What is a mortgage transfer?

A mortgage transfer is where a person is added, removed or replaced on an existing mortgage. This process is called a transfer of equity.

A transfer of equity may be used in the following ways:

• Adding a person to a mortgage
• Removing a person from a mortgage
• Replacing an existing person on a mortgage with somebody else

A transfer of equity is common in the following scenarios:

• Adding or removing a family member from a mortgage
• Adding or removing a partner from a mortgage
• Family mortgage transfers
• Adding a child to the deeds of a property
• Couples that want a sole mortgage as opposed to a joint mortgage

Some lenders are more open to equity transfers than others. This is why an advisor can give you a more tailored answer and provide the right guidance based on your circumstances.

Please note: If you wish to transfer your mortgage to a different property, this is known as mortgage porting. Learn more about porting a mortgage here.

Important things to consider during a mortgage transfer

A mortgage is a huge financial commitment that can span over decades. As a result, there are a few important points to consider before you commit to transferring. Your lender and broker will also check that you meet the criteria involved with the transfer.

Points that you should personally consider, along with the criteria that lenders will check for, are as follows:

• Affordability – can you afford the proposed mortgage?
• Equity in your existing mortgage
• Credit history
• The property itself (construction type and condition)
• Employment situation
• Reasons for transferring a mortgage
• Costs involved
• Stamp duty (where applicable)
• Early repayment charges
• Independent legal advice (for each party concerned)

There are other points to consider, such as your circumstances. For instance, you may have recently become self-employed or plan to go on maternity leave. Each of these factors will have a bearing on the suitability of particular lenders. That’s why it’s always recommended to speak to an advisor to see what your options are.

How do I add someone to my mortgage?

Adding someone to a mortgage is the most common reason for a mortgage transfer. Couples may be moving in together and want to share the financial costs. Typically, adding a partner to a mortgage involves changing a single mortgage into a joint mortgage.

From a lender’s perspective, adding another person to a mortgage can offer them more security. Nonetheless, lenders will still carry out their usual checks to ensure the mortgage is affordable for the new homeowner.

You may also be charged stamp duty. This is because the new homeowner is technically purchasing part of your property. Adding a partner to a mortgage also involves legal changes to the property deeds.

Although a transfer can happen anytime, you may be subject to an early repayment charge (ERC). This is likely to occur if you transfer during your existing mortgage term. If this is the case, it’s best to add your partner when it’s time to remortgage.

Not only will this save you from having to pay an early repayment charge, but you can then take out a new joint mortgage together rather than making a transfer of equity.

Can I buy my partner out of a joint mortgage?

Couples that have separated and have moved out no longer want to pay a mortgage on a property they no longer live in. The options left are to either sell the property together, or one partner can buy the other partner out. You can then remove an ex-partner from the mortgage and the property title. The process can be quite simple, especially if both partners remain amicable.

A transfer of equity is still possible, but lenders would check that the remaining homeowner can afford to repay the mortgage. Furthermore, the remaining homeowner must buy their partner’s share of the property. Once a partner’s name is removed from the mortgage, most lenders insist they also move out of the home.

Removing a partner from a mortgage is based mainly on affordability, but other factors are still checked. This can involve details of employment, income and credit checks.

It’s also important to note that marriage does not affect removing partners from a mortgage. Lenders will treat married applicants and cohabiting couples similarly in such circumstances. From a lender’s perspective, anyone named on the mortgage is responsible for repaying it, irrespective of their marital status.

Read more: How to buy your partner out from a mortgage.

Can I replace one person on the mortgage with somebody else?

Replacing one person on your mortgage with another is certainly possible. This first requires removing a person from a mortgage and then adding the new homeowner. This can all be done during the transfer of equity.

Replacing one homeowner with another can be straightforward. This is certainly true when the new homeowner meets the lender’s affordability criteria.

Removing a person from a mortgage can place an additional cost on the remaining owner as their share of the repayment amount will increase. Having a replacement has the opposite effect, as it can provide additional capital to buy the previous owner out.

If you’ve inherited a property, you may want the existing mortgage in your name. Read more about probate and mortgages here.

How do I transfer my mortgage to somebody else?

If you simply want to transfer your mortgage to another person, it is possible, but there are a few caveats. This is known as gifting a property.

Lenders will only agree once the original mortgage has been settled. Typically, you remove yourself from the mortgage by repaying the loan in full. The new homeowner will then take out a new mortgage on the property. Some lenders may only agree when it’s time to remortgage.

Other scenarios involve parents adding their children to the deeds of a property, which can provide children with financial security. Again, this can be done using a transfer of equity. Some families will also do this for reasons involving inheritance tax.

Can I transfer a mortgage if it involves bad credit?

Whether you’re adding or removing a person from a mortgage, lenders will still carry out their usual checks as a standard procedure. This does involve carrying out credit checks on where the mortgage is being transferred. Lenders do this so that they can check the financial conduct of the new or existing homeowner.

Often enough, break-ups between couples can sometimes lead to one or both partners ending up with credit issues. It’s a common scenario where a divorce or separation has left one or both partners with either CCJs, defaults or a combination of credit issues. If bad credit is involved, then it does become difficult to transfer. Nonetheless, transferring a mortgage with bad credit is still possible.

Lenders will usually check the severity of the credit issues along with how recent they were. There really is a multitude of possibilities when it comes to bad credit. As a result, it’s only possible to provide a tailored answer by speaking to you. You can make an enquiry to check whether or not a transfer will be eligible.

Consult a specialist with experience in this field

Transferring a mortgage can be simple when the advice you receive is right. Often enough, a lack of experience or approaching an unsuitable lender can result in mortgages being declined.

Mortgage transfers are second nature to our specialists, who deal with them daily and have been doing so for several years. Whether you’re adding, removing or replacing someone on your mortgage, our advisors can guide you through the process.