Getting a Mortgage on a Flat

The ability to get a mortgage on a flat will depend on a few factors that you should be aware of, namely the stipulations from different lenders on different properties.

While it shouldn’t necessarily be more difficult than getting a mortgage on a house, there may be some hurdles to overcome according to your circumstances. A good mortgage broker specialising in flats can help you through the process, but let’s help make things clearer initially here.

Can you get a mortgage on a flat?

Yes, in theory, but whether your application is successful will depend on a few elements, and while different lenders do have varying degrees of amenability towards mortgages on flats, bear in mind that financing these kinds of properties is relatively commonplace.

With support from a specialist broker, you may find it more straightforward than you think.

However, do bear in mind what lenders will look at when considering your application:

Your affordability

Like all mortgages on every type of property, first and foremost, banks want to be assured that you can afford to pay the mortgage back. They must be satisfied that you have an adequate income to cover the monthly loan cost and that your typical outgoings don’t tip that balance towards financial inviability.

Read more about this in our detailed mortgage affordability guide.

Your eligibility

Lenders will also consider your status on several criteria: how much you want to borrow vs. the cost of the property (loan-to-value ratio), your age, what you do for a living, and your credit history.

What type of property you want to buy

The kind of flat you’re looking at will have some bearing on whether you’ll be granted a mortgage. This is one of the biggest obstacles in mortgaging a flat, as lenders are always more wary of ‘non-standard’ properties.

The following types will have some bearing on your application and potentially the deal you end up with:

• Studio flats Might fall below the minimum size requirements.
• Flats within commercial buildings: A valuer’s report might determine a mortgage outcome for flats above or inside shops, pubs, and food establishments.
• Ex-authority flats: Resale value or the style of property (balconies, communal gardens, etc.) might be an issue.
• High rises: Multiple-storey flats can be an issue for some lenders.
• Basement flats: Lenders must be satisfied with mortgageability via a report.

When the flat was built

New-build flats can be a stumbling block when getting a mortgage because of their tendency to devalue in price once they have been purchased initially. While it’s still possible with some banks, you may find that the loan-to-value ratios on new-build mortgages will be lower and, therefore, less attractive if you’re looking at mortgaging high.

Whether that property is freehold or leasehold

A freehold flat might cause mortgage problems, whereas a leasehold is much more straightforward. We will go into this in more detail further down.

How a broker can help get a mortgage on a flat

When there are complexities within a mortgage application – such as a property type that not all lenders accept, like a non-standard flat – working with a specialist broker is always a good idea. Heading alone into the mortgage wilderness can leave you confused, closed off to the market and ultimately unsuccessful.

Trying to get a mortgage on a flat is no exception. There are variants to understand, lenders to lean towards and deals to negotiate. Because the additional complication of property classification comes into the eligibility criteria, you could end up with loan-to-value ratios or interest rates that are not ideal or doors being closed to you altogether.

Experienced and niche brokers, like the ones we work with, know where to look, who to turn to, and can offer advice and practical support in strengthening your application. Whether you’re looking for a standard residential mortgage or a buy-to-let, or even if you’re looking at remortgaging a flat, get in touch with our team to get matched to the right professional today.

Getting a mortgage on a freehold flat

There are specific restrictions on these, and the number of lenders willing to finance freehold flats falls dramatically. That said, a select few, including NatWest, Central Trust Limited, HSBC, Livemore Capital, and Nationwide, will look at them, so all is not lost if you have your heart set on a flat in this category.

Conditions around the flat’s legal arrangements, whether the freehold applies to the entire building, leases and tenancies within the remaining building, and a valuer’s report might come into play. Some banks will only offer freehold mortgages in Scotland, where freehold flats are more common than leasehold.

Why is this harder?

It all comes down to accountability. When you own a freehold flat, you essentially own that and the land it stands on, making buying, selling and maintenance complicated and open to dispute. Lenders prefer leasehold flats because there is a clear view of who owns what in and around the flat, usually one singular landowner.

Which lenders will consider your application?

The majority of mortgage lenders are open to lending on flats; however, as we’ve already outlined, the conditions can be the stumbling blocks. While they generally offer lower loan-to-value ratios than they do on houses, most are still open to negotiation and different mortgage types, such as buy-to-let, commercial, and interest-only.

What about remortgaging?

Remortgaging is usually much easier than getting an initial mortgage on a property. Most lenders open to lending on flats will be open to talking about a remortgage. This should be a relatively straightforward process if your circumstances haven’t changed and your flat hasn’t fallen in price. Whatever your reasons for remortgaging, it’s still wise to go through an independent broker to ensure restrictions and unfavourable rates do not halt you.

Getting a buy-to-let mortgage on a flat

All of the restrictions outlined above still apply to a buy-to-let mortgage on a flat, but most lenders are open to the possibility for those who are eligible. There are additional conditions, though, such as EPC rating requirements (energy performance certificate), and loan-to-value ratios offered are generally lower across the board.

Get matched with a mortgage broker who specialises in flats

The independent brokers we work with are specialists in their fields, so when it comes to understanding how the landscape works around mortgaging a flat, they know where to go and how to do it. They also know which issues will need to be solved and how to transform applications into strong contenders. Ultimately, they negotiate on behalf of their clients to ensure the very best deals are obtained.

We carefully match you to the right person for you and demand that all of the brokers we work with are fully trained and five-star rated. Contact us today on 0330 818 7026 or make an enquiry online for an initial free consultation.