Joint Mortgages When One Person Dies

If someone you shared a joint mortgage with dies, the process can be complicated to navigate - we’ll explain the necessary steps as simple as possible.

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Home Mortgage Application Joint Mortgages When One Person Dies

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: October 27, 2023

Handling practical matters during bereavement can be difficult. Unfortunately, certain things must be dealt with, including your mortgage. If someone you shared a joint mortgage with dies, there are steps you should take to avoid financial difficulties.

The process can be complicated to navigate for the first time, especially with everything else going on, but we’ll explain the necessary steps and keep things as simple as possible.

What happens if one person dies on a joint mortgage?

If the mortgage was arranged as a joint tenancy, the surviving partner would inherit all of both the property equity and mortgage debt in the event of the other’s death. For tenants in common, the deceased person’s share goes to whoever they have bequeathed this to in their will – this could be the surviving joint mortgagee but it might not be. In any case for tenants in common the surviving mortgage holder will still bear responsibility for the outstanding loan.

You can read more about these mortgage types in our guide to joint tenants vs tenants in common. If you know which one you’re dealing with, here’s what happens next:

Joint tenancy mortgage

If one person dies under this type of arrangement the mortgage becomes yours entirely and you will be responsible for the repayments.

The deceased person may have a life insurance policy that will pay out in this event and either cover or help with the remaining mortgage balance. However, this isn’t always the case, and if so, you’ll need to know what your options are. An experienced broker would be able to outline them for you so you’re clear on what you can do next.

 Tenants in common mortgage

If the deceased person didn’t leave a will, their share of the property will be inherited by their closest living relative, as defined by the government’s rules on intestacy. Again, this could be you (if you are their legal spouse or civil partner, it usually is) or it could be someone else.

If it is you, you now own the whole property and are responsible for the mortgage. If it is someone else, you now own the property jointly in common with them.

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When to notify the lender

You should notify the mortgage lender as soon as possible after someone’s death. Lenders are usually very understanding and happy to help if they can, for example by putting repayments on hold while the estate is being settled.

They will also explain their procedure following a death and anything you need to do. They will usually ask you to provide a copy of the death certificate, either by post or by taking it into a branch.

Potential problems

One potential problem is that you may not have access to all your partner’s bank accounts. You’ll still have access to any joint accounts you shared, but accounts in their name alone will usually be frozen until after probate. If this will affect your ability to make mortgage repayments in the short term, get in touch with your lender to see what they can do.

Perhaps the biggest – and very common – problem is that, if your partner died without life insurance, you may not be able to afford the mortgage repayments by yourself. Don’t panic if this is the case – there are steps you can take.

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What to do if you’re unable to pay

Most people would struggle to repay a joint mortgage alone. If you find yourself in that position, here are some of your options:

  • Requesting a payment holiday from your lender (which is a good short-term solution but will require further action)
  • Extending your mortgage term to spread the repayments over a longer period (which may cost more overall but could allow you to stay in your home)
  • Switch to an interest-only mortgage which will have a lower monthly cost (although the amount you owe would remain the same)
  • Using any money you’ve inherited or received from life insurance or death in service benefits to make a lump sum overpayment, to reduce the debt
  • Selling the property and moving to a cheaper one
  • Remortgaging to find a better deal or add another name

If you want to remortgage, we’d advise speaking to a broker. They can take most of the administrative burden from you if it’s too much to deal with. Plus, with their help, you can be sure that you’re getting the best deal that’s currently on the market.

Even if you’re not sure that you want to remortgage, speaking to a broker we work with can help you compare your options. If they think that you’d be better off sticking with your current lender and extending your mortgage term or switching to interest-only, they’ll tell you.

How long will you have to repay the mortgage?

If you don’t make any changes to your joint mortgage when one person dies, it simply continues. You’ll have the same time remaining to make your repayments with the same rate and terms.

If you’re unable to pay and need to sell the property, your lender will give you a reasonable amount of time to do so. They may agree to suspend repayments until the sale, although you should be aware that interest will continue to accrue, so your debt will grow.

Speak to a broker experienced in these cases

If you have any remaining questions about what happens to your joint mortgage or what you should do next, speak to a broker. They’ll be happy to discuss all your options and give you personalised advice.

An easy way to find a specialist with the right experience is to use our free broker-matching service. We’ll arrange a no-obligation chat with someone who regularly assists with situations like this and who can give you peace of mind. Just give us a call on 0808 189 2301 or contact us online.

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FAQs

If your partner dies, the mortgage will need to be repaid. If they had life insurance, you can use this to pay the balance. You could also use death in service benefits, or any savings, investments, or other assets in their estate.

If the full debt cannot be repaid from these sources, your options are to sell the property or to apply for a mortgage in your own name. To get a mortgage, you’ll need to pass the lender’s affordability assessments.

Arrangements for this can be quite complex, especially if there was a will in place, so liaising with whoever handles the estate and the probate will be very important.

If there is a joint tenancy mortgage on the property, then no will is necessary to determine what happens. The surviving joint tenant will inherit the property and be responsible for repaying the mortgage.

During probate, the executor of the will must arrange for the deceased person’s outstanding debts – and inheritance tax if applicable – to be paid before any of the proceeds from the estate can be distributed. Probate can take many months and may require selling the property.

Technically, the mortgage is due to be repaid throughout. In practice, lenders will usually agree to a payment holiday.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

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Pete Mugleston

Mortgage Advisor, MD

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