Getting a Mortgage on a Maisonette

Translating to a “little house,” a maisonette is very similar to a flat. The key difference is that maisonettes typically have a separate entrance that provides more privacy and security.

For this reason, maisonettes can be a popular choice among buyers. But how does a maisonette mortgage differ from that on a flat or house, and who offers mortgages for this type of property?

The guide below answers your questions and explains 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. However, the number of lenders who will consider your application may be limited, and it could be even smaller 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 and the property means you’ll be responsible for maintaining both. That includes any gardens, garages, outhouses or driveways on the land. And, of course, with maintenance comes costs. A lender will factor this in when calculating whether they think you can afford the mortgage you’ve applied for. Therefore, you must do the same before submitting an application.

A broker can provide some average upkeep costs for a freehold maisonette and help you determine your exact mortgage affordability.

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 new. Before purchasing, it’s important to ask what the price of both will be and how long the current leasehold will last. A lender will factor these elements into its affordability assessment.

Most lenders will accept a remaining leasehold exceeding 90 years. Still, if it is lower than 60 years, the number of lenders willing to offer a leasehold maisonette mortgage will decrease while interest rates will increase. A broker can 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 a 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, which passes on each time the maisonette is sold. This 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.

Eligibility requirements

Aside from the leasehold/freehold status, to lend on a maisonette, lenders will also want to know:

• You can afford the mortgage: They’ll consider your income and spending habits while 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 on how much you’re able to borrow and the type of interest rate offer you can get
• How much you have as a deposit: Lenders typically see Maisonettes 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. 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%, some lenders such as NatWest, Scottish Building Society and Virgin Money will offer such a loan, but only under certain circumstances.

Other factors that could impact 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 some big and complicated things to consider, so engaging expert help is smart. 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 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, such as bad credit or debt.

If you get in touch, we can arrange for a broker who has experience securing mortgages for maisonettes to contact you directly.

Which lenders offer mortgages for this property type?

Quite a few lenders, including HSBC, Live More, and Penrith Building Society, 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.

Others, like United Trust Bank, will 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, so working with one throughout this process is worth it.

Are interest rates higher for maisonettes?

They can be, but this will depend on the maisonette you purchase.

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 can expect to sit toward the higher end of the current interest rate range, 2.5% to 5.5%.

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, e.g., 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, a garden, etc.?
• Would you be willing 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? Services charges and ground rent are usually higher on these, and this 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. Call 0330 818 7026 or fill out an enquiry form here to connect.