Can I Get a Mortgage on a House I Have Inherited?

Inheriting a property can bring mixed emotions.

Alongside the personal significance, there are often practical and financial questions to work through. Many people are unsure what happens if there is an existing mortgage, whether they need to sell the property, or whether they can take ownership and arrange a mortgage in their own name. It is common to feel unprepared when a property is inherited. You may be unsure what steps need to be taken legally, whether probate affects your options, or how lenders view inherited homes. Understanding the available mortgage routes can help you decide what to do next. This article explains the main mortgage options available when you inherit a property in the UK, including living in the property, renting it out, remortgaging, or buying out other beneficiaries.

What mortgage options are available for an inherited property? When you inherit a property, your mortgage options depend on several factors. These include whether the property already has a mortgage, whether probate has been completed, whether the property is shared with other beneficiaries, and what you plan to do with the home. If there is an existing mortgage, the lender will need to be contacted early on. They will usually want to know how the outstanding balance will be dealt with.

This typically leads to one of two outcomes. If no beneficiary wants to keep the property, it is usually sold and the mortgage repaid from the sale proceeds. Any remaining funds then form part of the estate. If a beneficiary wants to keep the property, the existing mortgage is usually repaid and replaced with a new mortgage in the beneficiary’s own name.

This means applying for a mortgage based on your income and circumstances, rather than taking over the original loan. You are not usually required to stay with the original lender. If you are keeping the property, you can explore mortgages with any lender willing to consider your situation. Once this position is clear, inherited property mortgages generally fall into four broad categories.

Standard residential mortgage. If you plan to live in the inherited property as your main home, a standard residential mortgage may be appropriate. This works in much the same way as any other residential mortgage, with the lender assessing affordability, income, credit history, and the value of the property.

Buy-to-let mortgage. If you plan to rent the property out rather than live in it, a buy-to-let mortgage may be required. Lenders will typically assess the expected rental income as well as your personal financial position. This option may suit beneficiaries who do not wish to sell but are not planning to occupy the property themselves.

Remortgaging an inherited property. If the inherited property is mortgage-free, it may be possible to remortgage it to release funds. This can be used for purposes such as renovations, paying inheritance-related costs, or supporting other financial plans. The amount available will depend on affordability and the lender’s criteria.

Bridging finance. In some cases, short-term finance may be used to cover a temporary gap. This can be relevant if funds are needed quickly, for example to buy out another beneficiary or carry out essential work before a longer-term mortgage is arranged. Bridging finance is usually intended as a temporary solution rather than a long-term arrangement.

Can I use a mortgage to buy out siblings or other beneficiaries? Yes, it is possible to use a mortgage to buy out other beneficiaries and take sole ownership of an inherited property. This is often done through a transfer of equity, where ownership shares are adjusted and one person becomes the sole owner. Lenders will usually require confirmation that all beneficiaries agree to the arrangement and that the mortgage is affordable based on your individual income. A solicitor will handle the legal transfer and ensure funds are distributed correctly.

Can I get a mortgage if the property is still in probate? No. A mortgage cannot usually be completed until probate has been granted and ownership has legally transferred. Probate confirms who is entitled to manage and inherit the estate. While you can begin gathering information and speaking to lenders during probate, funds are not normally released until the legal process is complete and the property is registered in your name.

Can I take over the deceased person’s mortgage? In most cases, lenders do not allow an existing mortgage to be transferred directly to a beneficiary. Instead, the original mortgage is repaid and replaced with a new mortgage in the beneficiary’s name, subject to affordability checks.

What legal steps must be completed first? Before applying for a mortgage on an inherited property, several legal steps must be completed. Probate or letters of administration must be granted. Any inheritance tax due must be settled. Ownership must be registered with the Land Registry. Only once these steps are complete can a mortgage usually proceed.

Frequently asked questions. Do I have to pay tax on an inherited property? Inheritance tax may apply depending on the value of the estate and available allowances. Capital gains tax may apply if the property is later sold for more than its value at the date of death. How long does probate take? Timescales vary. Straightforward estates may take a few months, while more complex cases can take longer. What if I inherit a property with a mortgage I cannot afford? In many cases, selling the property or arranging a more affordable mortgage may be considered. Understanding your options early can help avoid unnecessary pressure.

Inheriting a property often involves both emotional and practical challenges. Taking time to understand the legal position and available mortgage routes can help you make informed decisions about what happens next.

Please get in touch if you’d like to speak about your mortgage.

Barry, The Mortgage Network - Helping you start the year with a clear plan, confident decisions and a mortgage that works for you.

Your property may be repossessed if you do not keep up repayments on your mortgage.