Remortgaging With a Transfer of Equity
Changing Property Ownership When You Remortgage
A remortgage and transfer of equity can be carried out together when you need to change the ownership of a property at the same time as changing the mortgage.
This might involve adding a partner to the property, removing an existing owner following a separation or changing the ownership arrangements for another reason.
Your conveyancer will deal with both the new mortgage and the legal transfer of ownership, making sure the requirements of your new lender are satisfied.
At Trusted Conveyancers, we’ve done the hard work, so you don’t have to, helping you find carefully selected conveyancing firms with experience in remortgage transactions.
No obligation • Quick response
What Is a Transfer of Equity When Remortgaging?
A transfer of equity is the legal process used to add or remove somebody from the ownership of a property without selling the property in the usual way.
When this happens alongside a remortgage, two things are effectively taking place:
- The mortgage arrangements are changing
- The legal ownership of the property is changing
For example, a property owned by one person might be transferred into joint names with their partner. Alternatively, a jointly owned property might be transferred into one person’s sole name following a separation.
Because the ownership is changing, the conveyancing work is more involved than a straightforward remortgage where the registered owners remain the same.
You can explore our Remortgage Conveyancing section for more information about the legal work involved when changing your mortgage.
When Might You Remortgage With a Transfer of Equity?
There are several situations where a transfer of equity and remortgage may be carried out together.
Situation |
What May Need to Happen |
|---|---|
|
Adding a Partner |
The partner is added as a legal owner and may also become jointly responsible for the mortgage. |
|
Removing an Owner |
One owner transfers their interest in the property to the remaining owner. |
|
Separation or Divorce |
One person may remain in the property and take over the mortgage, subject to the lender’s approval. |
|
Changing From Sole to Joint Ownership |
A second person is added to the property’s legal title. |
|
Changing From Joint to Sole Ownership |
One existing owner becomes the sole registered owner. |
|
Changing Mortgage Lender at the Same Time |
The existing mortgage is repaid and a new mortgage is registered alongside the ownership change. |
The precise legal work will depend on the ownership arrangements, the mortgage and the reason for the transfer.
Can You Remortgage and Transfer Equity at the Same Time?
Yes. It is common for a remortgage and transfer of equity to be dealt with as part of the same transaction.
Doing both together can make practical sense because the new mortgage lender needs to know who will own the property and who will be responsible for the mortgage.
Your conveyancer can coordinate the ownership transfer with the repayment of the existing mortgage and the registration of the new mortgage.
However, the transfer cannot simply be made without considering the mortgage lender.
Where a mortgage is secured against the property, the lender will normally need to approve any change affecting the people who own the property or are responsible for the mortgage.
Do You Need the Mortgage Lender’s Permission for a Transfer of Equity?
Yes, where the property is mortgaged, the lender’s involvement will normally be required.
A mortgage lender has agreed to lend based partly on the people responsible for repaying the mortgage. Adding or removing somebody can therefore change the lender’s risk.
If one owner is being removed, the lender will need to be satisfied that the remaining borrower can afford the mortgage.
If someone is being added, the lender may need to carry out affordability, identity and other checks before agreeing to the new arrangements.
Where you’re remortgaging to a different lender at the same time, the new lender will assess the proposed borrowers as part of the mortgage application.
The legal transfer can then be coordinated with the new mortgage.
Does Removing Someone From the Property Title Remove Them From the Mortgage?
Not automatically.
Property ownership and responsibility for the mortgage are connected but they are not the same thing.
Removing someone’s name from the property’s legal title does not, by itself, release them from their obligations under an existing mortgage.
The mortgage lender must agree to release that person from the mortgage.
This is particularly important following a separation. An agreement between the owners that one person will take responsibility for the mortgage does not necessarily release the other person from their obligations to the lender.
When the property is being remortgaged at the same time, the existing mortgage can normally be repaid on completion and replaced with the new mortgage in the names of the new borrower or borrowers.
What Does the Conveyancer Do?
A transfer of equity combined with a remortgage involves more legal work than a standard remortgage.
Your conveyancer will normally need to deal with matters including:
- Checking the legal title to the property
- Confirming the existing ownership arrangements
- Reviewing the new mortgage offer and lender requirements
- Obtaining information about the existing mortgage
- Preparing the transfer documentation
- Dealing with the outgoing and incoming owners
- Considering any Stamp Duty Land Tax or Land Transaction Tax requirements
- Obtaining the redemption figure for the existing mortgage
- Completing the transfer and remortgage together
- Repaying the existing mortgage
- Registering the new ownership and mortgage with HM Land Registry
Additional work may be required depending on the property and the circumstances surrounding the transfer.
How Does the Transfer of Equity and Remortgage Process Work?
Although transactions vary, the process will commonly involve the following stages.
1. Mortgage Arrangements
The new lender considers the mortgage application based on the person or people who will own the property following completion.
2. Conveyancer Instructed
The conveyancer obtains details of the property, existing owners, proposed new ownership and mortgage arrangements.
Identification and regulatory checks are also completed.
3. Legal Title Checked
The property’s Land Registry title is reviewed, including the existing ownership, mortgage and any restrictions or other matters affecting the title.
4. Transfer Documentation Prepared
The legal documentation required to transfer the ownership is prepared.
5. New Lender’s Requirements Satisfied
Your conveyancer deals with the requirements contained in the new mortgage offer and prepares for the new mortgage to be registered against the property.
6. Existing Mortgage Repaid
On completion, funds from the new mortgage are used to repay the existing lender.
Any other financial arrangements connected with the transfer are dealt with as agreed.
7. Ownership and New Mortgage Registered
After completion, the new ownership arrangements and the new lender’s mortgage are registered with HM Land Registry.
Does Money Have to Change Hands in a Transfer of Equity?
Not necessarily.
Someone can be added to or removed from the ownership without a conventional property sale taking place.
However, money sometimes does change hands.
For example, when one joint owner takes over a property following a separation, they may pay the outgoing owner an agreed amount for their share of the property’s equity.
Alternatively, someone being added to the property may contribute money towards acquiring their share.
Even where no cash payment is being made, taking responsibility for some or all of a mortgage can have tax implications.
That is why the financial arrangements surrounding the transfer need to be explained clearly to your conveyancer.
Is Stamp Duty Payable on a Transfer of Equity?
It can be.
For properties in England, Stamp Duty Land Tax (SDLT) may be relevant when ownership is transferred and the person acquiring an interest gives chargeable consideration in return.
Chargeable consideration does not necessarily mean a cash payment.
Taking responsibility for part of an outstanding mortgage can count as consideration for SDLT purposes.
For example, someone being added as a 50% owner of a mortgaged property may be treated as taking responsibility for a proportion of the mortgage. Depending on the amount involved and the person’s circumstances, this could create an SDLT liability.
Similarly, where one joint owner takes over the other owner’s share, consideration can potentially include both cash paid to the outgoing owner and the share of mortgage debt being taken over.
Not every transfer results in SDLT being payable, and different rules or exemptions can apply in particular circumstances.
Your conveyancer can establish whether an SDLT return is required and whether tax is payable based on the circumstances of the transfer.
Source: HM Revenue & Customs – SDLT: Transferring Ownership of Land or Property
What About Property in Wales?
Stamp Duty Land Tax does not apply to property transactions in Wales.
Instead, Land Transaction Tax (LTT) applies.
A transfer of equity involving a property in Wales can therefore have different tax requirements, and the position will depend on the consideration involved and the circumstances of the transfer.
Your conveyancer will consider the appropriate property tax requirements as part of the transaction.
What Happens to Stamp Duty After a Separation or Divorce?
The tax position can depend on how and why the property is being transferred.
In England, certain transfers between spouses or civil partners made as part of a formal agreement or court order following divorce, dissolution or legal separation can be exempt from SDLT.
The position can be different for unmarried couples or where the transfer does not fall within the relevant exemption.
This is an area where the precise circumstances matter, so you should not assume that a transfer following a relationship breakdown will automatically be exempt from property tax.
Your conveyancer can consider the transaction and advise on the appropriate SDLT or LTT treatment.
Can You Add a Partner to Your Property When Remortgaging?
Yes, subject to the mortgage lender agreeing to the proposed arrangements.
This commonly involves changing the property from sole ownership to joint ownership.
The person being added will normally need to be included in the new mortgage arrangements where a mortgage is secured against the property, and the lender will carry out its usual checks.
The conveyancer will deal with the legal transfer of the property into the new names and register the new ownership with HM Land Registry.
There may also be SDLT or LTT considerations where the incoming owner gives money, assumes responsibility for mortgage debt or provides some other form of consideration.
Can You Remove an Ex-Partner From the Property When Remortgaging?
Potentially, provided the new mortgage arrangements allow it.
This often happens following a separation where one person wishes to remain in the property.
The remaining owner may remortgage the property into their sole name, with the existing joint mortgage repaid on completion.
The new lender will need to be satisfied that the remaining borrower meets its lending and affordability requirements.
There may also be an agreement for the remaining owner to pay the outgoing owner for their share of the equity.
The conveyancer will need details of the agreed arrangements so that the ownership transfer, mortgage and any payment to the outgoing owner can be coordinated.
Does the Outgoing Owner Need Their Own Conveyancer?
Sometimes separate legal representation may be required or advisable.
A conveyancer acting for the person taking ownership and the new mortgage lender may not always be able to advise an outgoing owner where their interests differ.
This can be particularly relevant where an owner is:
- Giving up their interest in the property
- Being released from a mortgage
- Receiving money for their share
- Signing documentation affecting their legal rights
Whether separate representation is required will depend on the transaction and the firms involved.
Your conveyancer can explain the position once the proposed ownership and financial arrangements are known.
What Happens to the Equity in the Property?
A transfer of equity does not necessarily mean that the property’s equity is literally transferred as cash.
The term refers to a change in the legal ownership of the property.
However, the amount of equity can be important when the owners are deciding their financial arrangements.
For example, if two people own a property together and one is leaving, they may agree that the remaining owner will pay the outgoing owner for some or all of their interest in the property.
The amount involved will depend on factors such as the property’s value, outstanding mortgage and the agreement between the owners.
Your conveyancer implements the agreed legal arrangements but will not normally decide how the equity should be divided between separating owners.
Independent legal or financial advice may therefore be appropriate where the division of equity has not already been agreed.
How Much Does a Remortgage With a Transfer of Equity Cost?
A transfer of equity normally increases the conveyancing cost because additional legal work is required.
As a general guide, an additional legal fee of around £200–£600 or more may be charged for straightforward transfer-of-equity work alongside a remortgage.
The overall cost can depend on the conveyancing firm, property, mortgage lender and complexity of the ownership change.
Other costs can potentially include:
- HM Land Registry fees
- Property searches where required
- Bank transfer fees
- Leasehold or management company charges
- SDLT or LTT where applicable
- Separate legal representation where required
Your conveyancing quote should explain which costs are included and which could be payable in addition.
Learn More: Remortgage Conveyancing Costs →
How Long Does a Remortgage With a Transfer of Equity Take?
It can take longer than a straightforward remortgage because the legal ownership is changing as well as the mortgage.
A straightforward remortgage to a new lender will often take around 4–8 weeks, but adding a transfer of equity can increase the timescale.
How long the transaction takes will depend on matters such as the mortgage lender’s approval, how quickly the parties provide information, whether separate representation is required and whether any legal or tax issues need to be resolved.
Where a separation is involved, delays can also arise if the financial arrangements between the owners have not yet been agreed.
Starting the legal work early and making the conveyancer aware of the proposed ownership change from the outset can help avoid unnecessary delays.
Can You Transfer Equity Without Remortgaging?
Yes, in some circumstances.
A transfer of equity does not always require a change of mortgage lender.
If there is an existing mortgage, however, the lender will normally need to agree to the ownership change. The lender may be prepared to change the borrowers while keeping the existing mortgage, subject to its requirements.
Alternatively, the ownership transfer may need to be combined with a remortgage.
Where there is no mortgage secured against the property, a transfer of equity can potentially be completed without any mortgage arrangements at all.
Legal conveyancing work will still normally be required to prepare the transfer and register the new ownership.
If you’re unsure when legal representation is required for changing your mortgage, see our guide to Do You Need a Solicitor to Remortgage?
What Can Delay a Transfer of Equity and Remortgage?
Several issues can make the transaction more complicated.
Possible Issue |
Why It Can Cause a Delay |
|---|---|
|
Mortgage Approval |
The lender needs to approve the borrower or borrowers who will remain after completion. |
|
Financial Arrangements Not Agreed |
The transaction may not be able to proceed until the owners agree what will happen to the equity. |
|
Separate Legal Representation |
Another conveyancer may need to be instructed for an outgoing owner. |
|
SDLT or LTT Position |
The tax treatment may need to be established before completion. |
|
Existing Charges |
Other secured loans or charges may need to be dealt with. |
|
Title Restrictions |
Requirements on the Land Registry title may need to be satisfied. |
|
Leasehold Requirements |
The freeholder or management company may need to be involved. |
|
Additional Lender Requirements |
The new lender may require further information or documentation. |
Providing full details about the ownership change at the beginning can help your conveyancer identify these issues early.
How Can You Help the Transaction Progress Smoothly?
Make sure your conveyancer knows from the outset that the remortgage also involves a change of ownership.
Provide the full names and contact details of everyone involved and explain clearly who will own the property following completion.
Details of any payment being made between the owners should also be provided, together with information about the existing mortgage and any other secured loans.
Where the transfer follows a separation, provide any relevant agreement or court order to your conveyancer as early as possible.
Responding promptly to identification requests, forms and enquiries can also help prevent avoidable delays.
Most importantly, don’t treat the transfer of equity as something that can simply be added at the end of an ordinary remortgage. The new ownership arrangements affect the lender and the legal work and should be raised at the beginning.
Remortgaging With a Transfer of Equity: Quick Answers
Why Choosing the Right Conveyancer Matters
A remortgage involving a transfer of equity combines mortgage conveyancing with a change to the legal ownership of the property.
Your conveyancer may need to coordinate with the existing lender, new mortgage lender, other owners, HM Land Registry and potentially another conveyancing firm.
At Trusted Conveyancers, we’ve done the hard work, so you don’t have to. Rather than spending hours comparing firms yourself, we’ve carefully assessed the conveyancing firms we recommend based on communication, service standards, transparency and professionalism, so you can choose with confidence.
Transfer of Equity Experience
A conveyancer experienced in transfers of equity will understand the additional legal work involved when ownership changes alongside a remortgage.
Clear Communication
Regular updates help you understand how your remortgage is progressing and whether anything is holding it up.
Carefully Selected Firms
Every conveyancer we recommend is assessed against our selection criteria before being included.
A Smoother Remortgage
Proactive case management can help identify issues early and reduce avoidable delays.
Get Your Conveyancing Quote
Request your free quote today from a trusted conveyancer.
No obligation to proceed
Quick response time
Trusted professionals
Fixed-fee quotes
Continue Exploring
Explore more expert advice, conveyancing services and regional coverage to help you choose the right conveyancer for your property transaction.