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

Inheriting a home can often raise more questions than answers. What happens to the pre-existing mortgage? Do I have to sell the property? Can I have shared ownership with a sibling? Will the property be automatically transferred and owned outright?

At the time of inheriting a property, most people don’t feel prepared, and it can be hard to know where to begin. You might be unsure whether you can take out a mortgage, how to cover the payments, or what needs to be sorted legally before you can move in or rent the place out.

So, what are your options if you want to take out a mortgage on an inherited property?

In this article, we take a comprehensive look at the main mortgage options available when you inherit a property. Whether it’s a standard mortgage, a bridging loan, remortgaging, or buying out a sibling, we explore all the options that are available to you. Let’s get started.

What Are My Mortgage Options for an Inherited Property in the UK?

When you inherit a property, one of the first questions (and concerns) is often: “how can I afford a new place financially?”. Whether the house already has a mortgage, you plan to live in it, rent it out, or need to buy out a co-heir, each of these decisions will affect your options and routes to a mortgage early on. Depending on your plans and circumstances, it is worth considering all of the different mortgage options that are available to you.

If the property still has a mortgage in place, you will need to work with the lender before anything else can move forward. At this point, the lender will want to know how the outstanding debt will be settled, or if someone is taking responsibility for this debt. This is a normal part of the process and usually plays out in one of the following ways:

1. If there is no heir willing or able to take on the property, the home is sold and the sale proceeds are used to clear the mortgage debt. Any remaining funds will then be passed to the estate.
2. If you (the heir) choose to keep the property, you will need to arrange a new mortgage in your own name to repay the lender. This often means remortgaging the home onto a deal that fits your income and circumstances.

As such, this will mean liaising with the lender to understand their requirements, arranging to repay the outstanding balance, or remortgaging the home into a new deal in your name.

It’s important to note at this juncture that you are not tied to the lender who provided the original mortgage. Should you decide to keep the property and remortgage it into your own name, you can choose any lender willing to take on the case. This gives you room to find a deal that suits your income, plans for the home, and long term goals.

Taking these steps early can provide you with a clear sense of where you stand and what routes are realistically open to you. From here, the main mortgage options for an inherited property will usually fall into four categories:

• Standard Residential Mortgage

This is the most common and straightforward option if you plan to live in the property as your main home. A standard residential mortgage lets you take ownership and spread the cost over a term that fits your income and long term plans. It works much like any other home purchase, however, it’s crucial to note that the lender will need to assess your affordability before agreeing to move the loan into your name.

• Buy-to-Let Mortgage

This option is best if your plan is to rent out the inherited property, rather than live in it. Just like any other buy-to-let mortgage, the lender will want to evaluate the likely rental income the property will generate, along with your own financial position in order to judge whether the loan is affordable. A buy-to-let mortgage can be a practical route if the home would generate a steady income or if you are not ready to sell or move in.

• Remortgaging an Inherited Property

If the property has no mortgage attached, remortgaging an inherited property can help free up money. It is common for older properties that are inherited to require renovation work, home improvements, or other expenses. However, the amount you can release will depend on your chosen lender, the total value of the property, and your affordability.

• Bridging Loan

A bridging loan is a short-term loan that is designed to cover a financial gap – or bridge – until a longer-term solution can be set in place. It’s often used if you need money quickly, for example, to buy out co-heirs or to complete urgent work on the property.

Which Mortgage Option Works Best for an Inherited Home?

Each mortgage option will have their own pros and cons, and the right choice will wholly depend on your personal goals and finances. Ultimately, every situation is unique, which is why working with a trusted whole-of-market broker – like Boon Brokers – can make a real difference.

Here at Boon Brokers, we offer expert, fee-free mortgage advice, comparing lenders across the whole market to find the right mortgage for you. Our dedicated advisers guide you through every step, from understanding your options to supporting the application, making the journey to homeownership as simple and stress-free as possible.

Can I Use a Mortgage to Buy Out Siblings or Other Heirs?

Yes, when dealing with an inherited property split between siblings, it is possible to use a mortgage to buy them out and take full ownership. When buying out a sibling from an inherited house, lenders will want to see that all co-heirs agree to the buyout and that you can afford the repayments as a single borrower. Using a mortgage in this way allows one heir to take full ownership of the property while fairly compensating the other beneficiaries, avoiding the need to sell the home.

This type of mortgage works differently from a standard residential mortgage, as a transfer of equity is involved. Essentially, you are taking out a new mortgage in your name on the inherited property to raise the funds needed to pay the other beneficiaries their share.

In short: This is a mortgage taken out specifically on an inherited property, secured against the home itself, to raise funds to buy out other heirs. It allows one beneficiary to gain full ownership without needing to sell the property.

The Practical Steps to Buying Out a Sibling or Other Heir

While every situation is unique, there are some typical steps that most people follow to ensure the buyout is fair, legally protected, and fully funded through a mortgage or remortgage. These steps include:

1. Agree the Buyout Terms: All co-heirs must agree on the amount each person will receive. This agreement is usually formalised through a Deed of Family Arrangement and is drafted by a solicitor, clearly stating the payment amounts and timing before the property is legally transferred.
2. Arrange the Mortgage or Remortgage: Once the terms are agreed, you can apply for a remortgage or inherited property mortgage to raise the funds. Lenders will assess your affordability and will also require documented evidence that all co-heirs consent to the arrangement.
3. Transfer Ownership and Repay Co-Heirs: A solicitor will then handle the process so that the legal transfer of the property and the repayment to co-heirs happen simultaneously. This ensures that all beneficiaries receive their fair share while giving you full ownership of the home.

Working with a trusted mortgage broker can make this process much smoother. At Boon Brokers, we provide fee-free, whole-of-market advice, helping you identify lenders who will fund buyouts, navigate the legal and financial requirements, and structure the mortgage to suit your circumstances. Our dedicated mortgage experts will guide you through each stage, making the process as straightforward and stress-free as possible.

Can I Get a Mortgage If the House is Still in Probate?

No. When a property is still in probate, it means the estate is being legally administered following the owner’s death. This distinction is important because you do not legally own the property until probate is complete.

The executor will need to apply and wait for a Grant of Probate or Letters of Administration from the Probate Registry in order to begin any financial plans, including securing a mortgage. This ensures the estate has been correctly managed and that the property can legally be transferred to your name.

During probate, it is still possible to begin conversations with lenders, but no funds can usually be released until ownership is formally established.

At this time, it is important to consider practical matters such as probate house insurance and house valuation for probate. Keeping the property insured protects the estate, while valuing the home accurately helps with inheritance tax calculations and potential future mortgage applications.

By understanding and addressing these steps early, you can prepare for when the property becomes legally yours and make informed decisions about securing a mortgage, remortgaging, or planning other financial arrangements.

Can I Assume the Deceased Person’s Mortgage in the UK?

Yes, while it is technically possible to take over (or assume) the deceased person’s mortgage in the UK, assumption of a mortgage after death is rare and most lenders do not allow the original loan to be directly transferred to a new borrower.

Instead, lenders will typically require either repayment of the original mortgage or the arrangement of a new mortgage loan in your own name. This process is sometimes referred to as an assumption mortgage loan or assumption on a mortgage, but in practice it almost always involves taking out a new mortgage rather than assuming the old one.

It’s important to note that to approve the new mortgage, lenders will complete their own assessment of your financial situation and affordability, ensuring you can manage the repayments before the loan is finalised.

What Legal Steps Must I Complete Before Getting a Mortgage on an Inherited House?

Before you can apply for a mortgage on an inherited property, there are several legal steps that must be completed. These ensure that ownership is properly transferred and that lenders can legally lend to you. Understanding these steps early can make the mortgage process much smoother.

Key Steps to Prepare an Inherited Property for a Mortgage

• Apply for Grant of Probate or Letters of Administration

If the deceased left a will, you will need to apply for a Grant of Probate. This legal document confirms that you are authorised to manage the estate.

In the scenario that there is no will, you must apply for Letters of Administration. This can be submitted online via a PA1A Form on the government website.

These documents allow you to act on behalf of the estate and are required before ownership can be transferred.

• Settle Any Inheritance Tax Due

Before the property can be transferred into your name, any inheritance tax liabilities must be paid. This step ensures the estate is legally clear and avoids delays when applying for a mortgage.

It’s also important to calculate the correct amount and submit payments on time to prevent interest or penalties from accruing.

Many people work with a solicitor or tax adviser at this stage, who can ensure the inheritance tax is calculated accurately, forms are submitted correctly, and payments are made on schedule.

• Transfer Property Ownership

Once probate is granted and any inheritance tax is settled, the property must be formally registered in your name with the Land Registry.

This legal registration is essential before lenders can approve a mortgage, as it confirms that you are the rightful owner of the property.

• Apply for a Mortgage

After completing these steps, probate will have been granted, any inheritance tax settled, and the property registered in your name. This means the estate is now ready for a mortgage application.

At this stage, lenders can legally lend to you, allowing you to secure the funds needed on the inherited property.

Can a Mortgage Broker Help with an Inherited Property?

Yes, working with a mortgage broker can help simplify the process of securing a mortgage on an inherited property and reduce the risk of costly mistakes.

It’s no secret that inheriting a property comes with its own unique set of challenges, from understanding probate requirements and dealing with co-heirs to completing the legal steps before securing a mortgage on a property that may already have a loan.

By working with a trusted mortgage broker, you can get help identifying lenders experienced in inherited property cases, exploring options for remortgaging, buyouts, or bridging finance, and navigating any inheritance tax considerations.

At Boon Brokers, our dedicated mortgage advisers provide a completely fee-free, whole-of-market service. We compare deals from over 100+ UK lenders, explaining all of your options in simple terms, ensuring you’re supported every step of the way.

Need help securing a mortgage on an inherited property?

Contact Boon Brokers today and let our dedicated experts help you find the mortgage solution that matches your needs.