Getting a Mortgage on a Maisonette
Find out how to get a mortgage on a maisonette and see how our specialist mortgage brokers can you help you through the process.
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Translating to “little house,” a maisonette is very similar to a flat, the key difference being they typically come with a separate entrance that provides more privacy and security. For this reason, they can be a popular choice amongst buyers, but how does a maisonette mortgage differ to that on a flat or house and who offers mortgages for this type of property?
The guide below answers your questions while breaking down what else you need to consider before applying for a mortgage on a maisonette.
Can you get a mortgage on a maisonette property?
Yes, of course you can. Just like with a house or flat, you can apply for a residential mortgage or even a buy to let. The number of lenders open to your application may be limited and could be smaller still depending on whether the maisonette you’re looking to buy is freehold or leasehold.
Some lenders will only loan on one or the other or may have differing criteria depending on which you apply for.
Freehold maisonette mortgages
Owning the land as well as the property means you’ll be responsible for maintaining both. That includes any gardens, garages, outhouses or driveways that are situated on the land. And of course, with maintenance comes costs. This is something a lender will factor in when they’re calculating whether they think you can afford the mortgage you’ve applied for. Therefore, it’s important you do the same before submitting an application.
A broker would be able to share some average upkeep costs for a freehold maisonette and work with you to ascertain exactly what mortgage you can afford.
Leasehold maisonette mortgages
Most maisonettes in the UK, excluding Scotland, are sold as leasehold, which means you’d own the property but only for a period of time agreed upon with the land owner, aka the freeholder. You’d then pay them ground rent (usually an annual fee of £50 – £100) and a service charge that acts as a contribution to maintaining any shared facilities such as the building’s roof, gutters or paved areas.
These costs tend to be higher if the property is a new build. It’s important to ask what the price of both will be prior to purchasing as well as how long the current leasehold will last for. These elements will be factored into a lender’s affordability assessment.
Most lenders will accept a remaining leasehold exceeding 90 years, but if it lowers to close to 60 years, the number of lenders willing to offer a leasehold maisonette mortgage will decrease while interest rates will increase. A broker would be able to share which lenders are open to shorter leaseholds.
Share of the Freehold maisonette mortgages
A third possibility involves a hybrid of leasehold and freehold, known as share of the freehold, that’s more commonly found in big cities where maisonettes might once have been a part of one big house.
When the property was divided, owners might have been given a share of the freehold and this passes on each time the maisonette is sold. It means the maisonette still falls under the leasehold but you would have a say in decisions pertaining to the building land and maintenance while also sharing the costs with other owners.
Some lenders won’t consider mortgages where the freehold is shared because of the additional complication of co-management with neighbours.
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Aside from the leasehold/freehold status, to lend on a maisonette, lenders will also want to know:
- You can afford the mortgage: They’ll look at how much you earn and what you typically spend while also calculating any ground rent, service charges or upkeep costs that might come with a maisonette.
- Whether the property is a new build: Not all lenders are willing to loan on a new build maisonette because of the potential for higher service charges and ground rent. If they are particularly high, the pool of lenders will reduce even further which could have a knock on effect for how much you’re able to borrow and the type of interest rate offer you can get
- How much you have as a deposit: Maisonettes are typically seen by lenders as risky, which means they usually require a lower loan to value (LTV) ratio to offset that. Some even place a maximum LTV cap of 60%, especially if it’s a new build maisonette. Having a bigger deposit – perhaps 25% of the property’s value or above – will increase your chances of getting a good deal. Should you require an LTV of closer to 80% or even 95% there are some lenders such as NatWest, Scottish Building Society and Virgin Money that will offer such a loan but only under certain circumstances.
Other factors which could impact upon your chances of getting a mortgage include your credit history, type of employment, debt to income ratio, and age.
How a broker can help you get approved for a maisonette mortgage
Such a “little house” brings with it some big and complicated things to consider, which is why the smart thing to do is to engage expert help. A broker can demystify the mortgage process for a maisonette, ensuring you’ve considered all factors and are in the strongest place to apply for a mortgage. The brokers we work with:
- Know which lenders offer maisonette mortgages and, out of those, which have preferential rates for leasehold and freehold arrangements. This will save you time and lead to a higher chance of mortgage approval the first time around
- Can break down any extra costs you may need to factor in as a maisonette homeowner
- Have experience in putting together maisonette mortgage applications that give borrowers an optimal chance of securing the loan they’re looking for. This ensures a smooth process and allows you to jointly address any issues that a lender might have with your application, for example, bad credit or debt.
If you get in touch we can arrange for a broker who has experience securing mortgages for maisonettes contacts you directly.
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Which lenders offer mortgages for this property type?
There are quite a lot of lenders, including HSBC, Live more and Penrith Building Society, that accept applications for maisonette mortgages. The list decreases, however, when it comes to freehold maisonette mortgages. For example, Aldermore, Halifax for Intermediaries and Clydesdale Bank would all reject applications on this basis.
For others like United Trust Bank, they’ll offer them but there might be stipulations. A common one is that a maisonette can’t be located above commercial premises or can’t be a new build.
Specialist brokers are already familiar with such caveats, which is why it’s worth working with one throughout this process.
Are interest rates higher for maisonettes?
They can be but this will depend on the type of maisonette you’re purchasing. If, for example, the maisonette:
- Is a new build
- Is a leasehold with a shorter length of time remaining on the lease
- Is located above a shop or other type of business
you could expect to sit toward the higher end of the 2.5% to 5.5% current interest rate range.
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Things to consider
Before you apply for a mortgage on a maisonette property, there are some additional questions you should ask yourself as you weigh up the pros and cons:
- Are you happy to share certain elements – a driveway, gardens or entrance path – with others in the building?
- Will you be able to cooperate with neighbours when it comes to sharing expenses for the upkeep of exteriors and a garden etc?
- Would you be happy to adhere to any potential house rules – such as no pets or noise after a certain time – that could come with sharing a building?
- Are you looking for a new build maisonette as services charges and ground rent are usually higher on these and it will impact the mortgage rates and LTV?
Get matched with a broker experienced in maisonette mortgages
To access the best maisonette mortgage rates and terms, the wisest thing to do is to team up with an expert who knows this mortgage market well. They’ll be able to navigate you through the application process, talk you through any anomalies when it comes to maisonettes and shepherd your application toward a lender they know has a history of approving such mortgages.
We have a number of brokers we work with who fit this description and you can be matched to one for a free first-time consultation. Simply call 0808 189 2301 or fill out an enquiry form here to be connected.
Speak to an expert on maisonette mortgages
Maximise your chance of approval with a broker
Typically maisonettes are cheaper than houses but, like with any property, whether it’s a good investment will depend on the one you select. Where a property is located, whether noise is an issue and what condition the maisonette is in are a few of the factors that can have an impact.
The main difference between the two properties is that a maisonette typically has a private entrance which means there are no shared interior spaces. It also might come with a garden or garage.
They can be under certain circumstances. If the property is a freehold or a leasehold with a limited amount of years remaining on the lease, your buyer might find it more difficult to get a mortgage to purchase the property. Likewise if it’s located above a commercial property.
The good news is that many maisonettes are considered sellable, which is why there are mortgage lenders who confidently offer finance to borrowers in the market for them.
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