Remortgage to Add Partner to Mortgage

Why Add Your Partner to Your Mortgage?

There are many reasons why homeowners choose to add their partner to their mortgage. Understanding your motivation can help you decide whether this is the right step and which approach best suits your circumstances.

Shared financial responsibility: Adding your partner means both of you are legally responsible for the mortgage repayments. This can feel fairer if both of you are contributing to the household finances, and it provides your partner with legal recognition of their financial contribution to the home.

Increased borrowing capacity: Two incomes are typically stronger than one. If you want to remortgage to borrow additional funds for home improvements or other purposes, having two applicants on the mortgage can increase the amount a lender is willing to offer.

Legal protection for your partner: If your partner is living in your home and contributing to the mortgage payments but is not named on the mortgage or title deeds, they have limited legal rights to the property. Adding them provides security and certainty for both of you.

Estate planning: Having both names on the property and mortgage can simplify inheritance matters. If the property is held as joint tenants, it passes automatically to the surviving partner on death, avoiding the need for probate.

Relationship milestone: For many couples, adding a partner to the mortgage represents a commitment and a step forward in their relationship. It is a practical way to formalise your shared investment in a home together.

Whatever your reason, it is important to consider the decision carefully. Once your partner is on the mortgage and the title deeds, removing them requires their consent and involves its own legal process. Taking professional advice before proceeding can help you avoid complications later.

Transfer of Equity vs Remortgage: What Is the Difference?

There are two main ways to add a partner to your mortgage, and understanding the difference between them is crucial for choosing the right approach.

Transfer of equity: This is the process of adding someone to the title deeds of a property. It is a legal transaction handled by a solicitor or conveyancer. If your existing mortgage lender agrees, a transfer of equity can be carried out without changing your current mortgage deal. The lender will need to assess your partner and approve them as a co-borrower. This is often the simpler and cheaper option if you are happy with your current mortgage terms.

Remortgage: This involves taking out a new mortgage with either your current lender or a different lender, with both you and your partner named as co-borrowers. You might choose this route if your current deal has ended and you are on the lender's standard variable rate, if you want to borrow additional funds, or if your current lender will not approve the transfer of equity.

The key differences are:

• Cost — a transfer of equity with your existing lender is generally cheaper, as you may avoid arrangement fees, valuation fees and some legal costs. A remortgage with a new lender involves full application costs but could secure a better interest rate
• Speed — a transfer of equity can sometimes be completed more quickly than a full remortgage
• Flexibility — a remortgage gives you the opportunity to shop around for a better deal, change your mortgage term, or borrow additional funds
• Early repayment charges — if you are still within a fixed or discounted rate period, remortgaging with a new lender could trigger early repayment charges. A transfer of equity with your existing lender usually avoids this

A mortgage adviser can help you compare both options based on your specific circumstances and recommend the most cost-effective approach.

The Process of Adding Your Partner

Whether you choose a transfer of equity or a remortgage, there is a structured process to follow. Here is what to expect at each stage.

Step 1: Speak with your current lender. Contact your existing mortgage lender to discuss your plans. Ask whether they will allow a transfer of equity on your current terms and what their requirements are for adding a new borrower. This conversation will help you decide whether staying with your current lender or remortgaging elsewhere is the better option.

Step 2: Get professional advice. A mortgage adviser can review your options across the whole market and recommend the best approach. A solicitor will be needed to handle the legal aspects of the transfer, regardless of which route you take.

Step 3: Your partner's assessment. The lender will need to assess your partner as a co-borrower. This involves a credit check, income verification and an affordability assessment. Your partner will need to provide payslips, bank statements, identification and proof of address, just as they would for any mortgage application.

Step 4: Legal work. A solicitor or conveyancer handles the transfer of equity, which changes the ownership of the property at the Land Registry. They will also advise on how you want to hold the property — as joint tenants or tenants in common — and may recommend a declaration of trust if your financial contributions are unequal.

Step 5: Completion. Once the lender has approved the application and the legal work is complete, the transfer is registered with the Land Registry. Your partner is now a legal co-owner of the property and jointly responsible for the mortgage.

The process typically takes between four and eight weeks, though this can vary depending on the lender, the solicitor's workload and how quickly documentation is provided.

Legal Considerations and Property Ownership

Adding your partner to your mortgage is not just a financial decision — it has important legal implications that you should understand fully before proceeding.

Joint tenancy vs tenancy in common: When two people own a property together, they can hold it in one of two ways. As joint tenants, you each own the whole property equally, and if one of you dies, the property passes automatically to the survivor. As tenants in common, you can own different shares of the property, and each person can leave their share to whoever they choose in their will. If you have contributed different amounts, tenancy in common is usually more appropriate.

Declaration of trust: If you and your partner are contributing different amounts — for example, if you have already built up significant equity before adding them — a declaration of trust can protect your respective interests. This legal document sets out each party's share of the property and what happens if the property is sold or the relationship ends. It is a relatively inexpensive document to prepare but can save enormous difficulties later.

Stamp duty land tax (SDLT): If your partner already owns another property, adding them to yours could trigger the higher rate of stamp duty. This is calculated on the share of the property being transferred and can add a significant cost to the process. Your solicitor can advise on whether this applies to your situation.

Cohabitation agreements: If you are not married or in a civil partnership, a cohabitation agreement can set out how your finances are managed, including what happens to the property if you separate. Unlike married couples, cohabiting partners have limited legal rights, making this kind of agreement particularly valuable.

Wills: Once your partner is on the property, you should both review your wills to ensure they reflect your wishes. If you hold the property as tenants in common, each of you will need a valid will to direct your share of the property to your chosen beneficiaries.

Costs Involved in Adding a Partner to Your Mortgage

Understanding the costs involved helps you budget effectively and avoid surprises during the process.

Solicitor or conveyancer fees: Legal fees for a transfer of equity typically range from £500 to £1,500, depending on the complexity of the case and the solicitor's charges. This covers the legal transfer of ownership, Land Registry registration and any additional documents such as a declaration of trust.

Lender fees: If you are carrying out a transfer of equity with your existing lender, they may charge an administration fee, typically between £50 and £300. If you are remortgaging with a new lender, arrangement fees can range from nothing to over £1,000, depending on the product.

Valuation fees: A remortgage usually requires a property valuation. Many lenders offer free valuations as part of their remortgage deals, but if a fee applies, it is typically between £150 and £600 depending on the property value.

Stamp duty: If the higher rate of stamp duty applies because your partner already owns another property, this could add thousands of pounds to the cost. The amount depends on the value of the share being transferred. Your solicitor can calculate the exact liability.

Mortgage broker fees: If you use a mortgage adviser, they may charge a fee for their services, typically between £300 and £500. Many advisers are fee-free, earning their income from commission paid by the lender. Either way, the advice can save you money overall by securing a better deal.

Early repayment charges: If you remortgage away from your current lender during a fixed or discounted rate period, early repayment charges could apply. These are typically between 1% and 5% of the outstanding mortgage balance and can amount to thousands of pounds. Check your current mortgage terms before deciding to switch.

When weighing up the costs, consider the long-term benefits. Adding your partner may give you access to better rates, higher borrowing potential and greater legal security — all of which can outweigh the upfront costs over time.

What Lenders Look for When Adding a Partner

When you apply to add your partner to your mortgage, the lender will assess both of you as co-borrowers. Understanding what they look for can help you prepare and improve your chances of approval.

Combined income: Lenders will consider both your incomes when calculating how much you can borrow. This can be beneficial if your partner earns a good income, as it may increase your overall borrowing capacity. Most lenders will consider a combined income of around 4 to 4.5 times your joint earnings.

Credit history: Your partner's credit history will be reviewed as part of the application. If your partner has a poor credit record — including missed payments, defaults, county court judgements (CCJs) or bankruptcies — this could affect the application. Some lenders are more flexible than others, so a mortgage adviser can direct you to the most suitable options.

Existing commitments: The lender will consider your partner's existing debts and financial commitments, including personal loans, car finance, credit card balances and any other mortgages. These outgoings reduce the amount that can be borrowed.

Employment status: Lenders prefer stable, verifiable income. If your partner is employed on a permanent contract, this is straightforward. If they are self-employed, on a fixed-term contract, or in a probationary period, additional documentation may be needed and some lenders may be more cautious.

Deposit and equity position: The loan-to-value ratio remains important. If adding your partner does not change the mortgage amount, your equity position stays the same. If you are borrowing additional funds, the LTV will increase, which could affect the interest rate available to you.

If your partner's financial profile is weaker than yours, it is worth considering whether adding them to the mortgage could result in less favourable terms. In some cases, it may be better to carry out a transfer of equity to add them to the title deeds while keeping the mortgage in your sole name. A mortgage adviser can help you explore these options.