How to remortgage an inherited property
Inheriting a property with an existing mortgage can feel daunting, especially during a difficult time. This guide explains what happens to the mortgage, your options, and how remortgaging an inherited home works in the UK.
In this guide
What happens to the mortgage when you inherit a property?
When someone passes away, their mortgage doesn’t simply disappear. The debt remains secured against the property and must be dealt with as part of the estate. In most cases the executor or administrator is responsible for managing this.
If no insurance exists to clear the balance, the beneficiaries will need to decide whether to sell the property, repay the mortgage from other estate assets, or take the mortgage on themselves through a transfer of equity or remortgage.
How does probate affect an inherited mortgage?
Probate is the legal process of dealing with someone’s estate after they die. Until probate is granted, you generally cannot sell the property or remortgage it. The process typically takes between six and twelve months, though straightforward estates can be faster.
During probate, the existing mortgage payments still need to be made. The executor can usually arrange this from estate funds. If payments are missed, the lender could eventually take action — so it’s important to contact the mortgage lender as soon as possible to explain the situation. Most lenders will be understanding and may offer a temporary payment holiday.
What are your options with an inherited property?
Keep vs sell
Keep the property
- Live in it or rent it out
- Transfer the mortgage into your name
- May need to remortgage to get a suitable deal
- Could benefit from long-term property value growth
- Ongoing costs: mortgage, insurance, maintenance
Sell the property
- Clear the mortgage from the sale proceeds
- Distribute remaining funds to beneficiaries
- No ongoing property costs or responsibilities
- May be liable for capital gains tax on any growth since death
- Quickest way to release value from the estate
What are the tax implications of inheriting a property?
Key tax thresholds
£325,000
IHT nil-rate band
No inheritance tax on estates below this threshold
£175,000
Residence nil-rate band
Additional allowance when a home passes to direct descendants
40%
IHT rate
Charged on the value above the combined thresholds
How to remortgage an inherited property
If you’ve decided to keep an inherited property and remortgage it in your own name, here’s how the process typically works.
Obtain the Grant of Probate
You’ll need probate before any legal changes can be made to the property. Apply through the HM Courts & Tribunals Service or instruct a probate solicitor.
Contact the existing lender
Let them know about the bereavement and your intention to keep the property. They may allow a transfer of the mortgage, or you may need to remortgage elsewhere.
Get the property valued
A current market valuation helps you understand equity levels and what you can borrow. The probate valuation may differ from today’s market value.
Apply for a new mortgage
You’ll go through a standard mortgage application: income checks, credit assessment, and affordability testing. A broker can match you with lenders experienced in inherited property cases.
Complete the transfer of title
Your solicitor transfers the property into your name at the Land Registry and the new mortgage is registered against it.
Old mortgage redeemed
The new lender pays off the existing mortgage and your new deal begins. Monthly payments switch to the new lender.
Can you remortgage an inherited property to buy out other beneficiaries?
Yes. If you’ve inherited a property jointly with siblings or other family members, you can remortgage to raise the funds needed to buy out their share. The amount you can borrow depends on the property’s value, your income, and your overall affordability.
For example, if you inherit a £300,000 property equally with one sibling, you’d need to raise £150,000 (their half) through a mortgage. The lender will assess whether you can afford the repayments on your own income.
This can be a practical way to keep a family home, but make sure everyone agrees on the property’s value — an independent valuation avoids disputes later.
Speak to a specialist about your inherited property
“Dealing with Mum’s property felt overwhelming until our broker laid out the options clearly. We kept the home and the remortgage was far simpler than we expected.”
Contact Clearview Mortgage Solutions for a free, no-obligation chat about your inherited property. We’ll explain your options and help you find the right mortgage if you decide to keep it.
Related guides
More guides in our remortgage mortgage hub.
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