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Can You Transfer a Mortgage to Another Person?

Written by, Marija Petkova

Updated September, 7, 2022

When you move out, sell the house, or something unexpected happens, you might need a mortgage transfer.

But, can you transfer a mortgage to another person? 

Let’s find out.

What Is a Mortgage Transfer?

A transfer of a mortgage occurs when a borrower reassigns their mortgage, usually an existing home loan, to another person or entity. 

Mortgage transfers are possible but rare and only allowed in certain circumstances and with certain loans. In most cases, a lender might permit a transfer of a mortgaged property if you have an assumable mortgage and if the reason for the transfer is listed in the exception in the due-sale clause

The lender will also have to do a background check on the person that assumes the loan to verify if they can make payments promptly.

The simplest way to find out if your mortgage is transferable is to talk to your lender and go over your mortgage agreement. 

How To Transfer a Mortgage to Another Person

Transferring a mortgage requires completing a land registry TR1 form that includes details about the transferor and new owner and obtaining a copy of all contractual mortgage agreements and property title deeds.

If a mortgage isn’t assumable, the lender can still allow a transfer in case of a death of a joint tenant, divorce, separation, and transfers between family members.

Transferring a mortgage to a family or relatives 

In most situations, borrowers transfer a mortgage to family members for inheritance tax purposes. You can transfer a mortgage to a family member through a Transfer of Equity without having to remortgage, but the person who assumes the loan will have to meet eligibility requirements set by the lender. 

Transferring ownership of a house with a mortgage to a family member can be done at any moment, but you might face an early repayment fee (ERC). 

Transferring your mortgage share

If you’re in a joint mortgage, you can transfer your share of the mortgage to a family member. This is often done to add your kids to the mortgage or convert to sole ownership. It is crucial to talk to a mortgage broker or advisor to get a better understanding of the process and what it implies. 

Transferring a mortgage after a divorce

Transferring a mortgage after a divorce to one of the responsible parties usually requires filed quitclaim deed, copies of the divorce decree, and evidence that the person assuming the loan can repay it. In most cases, lenders charge transfer fees. 

Important Things to Consider During Mortgage Transfers

A mortgage is a long-term financial commitment and it takes years to pay it off. 

If you’re assuming a loan, you should take a hard look at your finances, the mortgage agreements, and the costs associated with the loan. You should also check the condition of the property and inform yourself about how the mortgage will affect your credit history. 

If you’re relinquishing your part of the loan to a former partner after a divorce, make sure that the lender removes your mortgage liability because a missed payment, even though you no longer have interest in the property, can negatively affect your credit score.

How to add someone to your mortgage

To add someone to your existing mortgage, you’ll have to contact the lender. They’ll send you documents to fill in and sign and they will conduct an eligibility check of their employment status and see if they have a good credit score.

You will also have to update the property deeds.

Lenders are more likely to allow borrowers to add another person to the mortgage. They also might charge legal and arrangement fees, as well as additional stamp duty fees.

How much does it cost to transfer a mortgage?

Mortgage transfers usually come with associated fees. The cost varies on a case-to-case basis, but in most situations, borrowers have to pay legal, administrative, and stamp duty fees.

Legal fees

When transferring a mortgage you may have to cover ID checks, pay to obtain the Register of Title for the property, and submit the change with the land registry.

Lender fees

Transferors are generally responsible for any fees that the lender may incur due to the transfer of the mortgage. The lender might also charge an Early Repayment Fee (ERC).

Stamp duty

When you transfer a share in the property to a partner, you might be charged a Stand Duty Land Tax (SDLT) if the value of the equity exceeds the SDLT threshold for the property type.

Bottom Line 

There are many reasons why you might want to transfer your mortgage to someone or add a new person to your existing mortgage. Regardless of the reason, transferring a mortgage is possible, though only in certain circumstances and if you have an assumable mortgage.

Frequently Asked Questions And Their Answers

What happens to a joint mortgage after a separation?

In a joint mortgage, both parties are responsible for making mortgage payments, regardless of whether they are divorced or not staying in the house. When a couple gets a divorce, one of the partners usually buys out the other partner’s share.

Can I transfer a mortgage if I’m self-employed?

You can transfer a mortgage as long as the lender allows it. If you want to assume a mortgage as self-employed, you’ll have to prove that you can make regular mortgage payments.

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

Yes, you can. This is often done within families. Can you transfer a mortgage to another person that’s not a family member? It’s possible but it happens rarely and only in certain situations.

My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.