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A transfer of equity is a change to who legally owns a property, without the home being sold on the open market. Common examples include adding a partner to the mortgage after moving in together, removing an ex-partner’s name after a separation, or a parent adding an adult child to the title. Where there is a mortgage, the lender has to agree, because anyone taking on a share of the property is usually also taking on some responsibility for the debt.
When do people need a transfer of equity?
The most common situations are:
- Divorce or separation, where one partner keeps the home and the other’s name comes off the mortgage and the title
- Adding a partner or spouse to the mortgage after marriage, civil partnership or moving in together
- A parent adding a child, or a family member being added, sometimes for estate planning reasons
- One joint owner buying out another’s share, for example after a relationship ends but before either party remortgages elsewhere
A transfer of equity is different from adding someone as a tenant or occupier. It changes legal ownership, which is why HM Land Registry and, where a mortgage exists, the lender both need to be involved.
What has to happen if there is a mortgage?
Where a mortgage is in place, the lender’s consent comes first. They will usually want to:
- Assess the income and outgoings of whoever is remaining on, or being added to, the mortgage
- Run a credit check on anyone joining the mortgage, and sometimes review the remaining borrower’s file again too
- Confirm the property’s value, and sometimes arrange a new valuation
- Decide whether the existing mortgage can simply continue with the new ownership, or whether a new mortgage, product transfer or further advance is needed
If the lender is not willing to make the change, for example because the remaining owner cannot afford the mortgage alone, the usual alternatives are to keep the mortgage as it is, sell the property, or move the mortgage to a different lender as part of a full remortgage.
Adding someone, removing someone, or a full remortgage: how they compare
| Adding someone to the mortgage | Removing someone from the mortgage | Full remortgage to a new lender | |
|---|---|---|---|
| Lender involved | Existing lender, usually | Existing lender, usually | New lender |
| Assessment | New person assessed for affordability | Remaining owner assessed alone | All applicants assessed |
| Credit check | Usually a hard search on the new borrower | Sometimes a fresh check on the remaining borrower | Usually a hard search |
| Land Registry update | Yes, to add the name to the title | Yes, to remove the name from the title | Not directly, though the mortgage changes |
| Typical trigger | Marriage, moving in together | Divorce, separation, buyout | Deal ending, borrowing more, declined elsewhere |
The pattern varies between lenders, and some situations combine more than one of these steps, for example removing a partner from the title while also remortgaging to a new lender.
Stamp duty land tax on a transfer of equity
Whether Stamp Duty Land Tax (SDLT) is due depends on what is exchanged, according to HMRC guidance on transferring ownership of land or property. Taking on a share of an outstanding mortgage counts as “chargeable consideration,” so SDLT can apply if the value of the share taken on, plus any cash paid, is above the relevant threshold. Transfers made as part of a divorce, dissolution of a civil partnership or formal separation agreement are generally exempt, even where a mortgage share is involved. Thresholds and exemptions can change, so check the current position on gov.uk or with a solicitor before assuming either way.
Does bad credit affect a transfer of equity?
It can. Being added to a mortgage means a lender assessing your credit file in the same way as any new application, so a CCJ, default or other adverse credit can affect whether you are accepted. Removing someone can also be affected, because the lender must check the remaining owner can afford the mortgage alone, and a thinner or less favourable credit file on its own can make that harder, particularly for self-employed applicants whose income is assessed differently.
What this means if you are remortgaging with adverse credit
A transfer of equity often happens at the same time as, or instead of, a full remortgage, and this is especially common after a separation where one partner’s credit history was affected by the relationship ending, for example through missed payments on joint accounts or a CCJ from a shared debt. If your existing lender will not remove a partner’s name because of affordability or credit concerns, remortgaging to a specialist lender that considers adverse credit is often the practical next step, rather than staying on a mortgage that no longer reflects who lives in the home. Our page on remortgaging after divorce with bad credit looks at this in more detail, and our guide on what happens when you remortgage explains the wider process if a new lender is needed alongside the ownership change. Where you are adding a partner to an existing mortgage rather than removing one, our page on joint remortgages with a partner who has bad credit covers how one partner’s credit history is weighed alongside the other’s income.
Speak to your existing lender before assuming a transfer of equity will be straightforward, since consent is not automatic, and get advice from a solicitor on the Land Registry process and any stamp duty position, since these are legal and tax matters this guide cannot resolve for your specific circumstances.
Frequently asked questions
Do I need a solicitor for a transfer of equity?
It is strongly advisable, and your lender will usually insist on it if a mortgage is involved. A solicitor or conveyancer handles the change at HM Land Registry and checks the legal position of everyone involved, including any mortgage debt being taken on. This guide does not cover fees, since these vary between firms.
Can I do a transfer of equity without telling my lender?
No. If there is a mortgage on the property, the lender must agree before the title changes. Going ahead without their consent can breach your mortgage conditions. Contact your lender early if you are planning a transfer of equity.
Will a transfer of equity show up on my credit file?
Being added to or removed from a mortgage is typically recorded on your credit file, since it reflects who is responsible for the debt. Being added alongside someone with adverse credit can also create a financial association between your files, covered in our guide on what a financial association is.
What happens if the remaining owner cannot afford the mortgage alone?
The lender will not remove the other party from the mortgage unless the remaining owner passes an affordability assessment on their own income. If they do not, the options are usually to keep both names on the mortgage, sell the property, or remortgage to a lender willing to accept the remaining owner's circumstances, including adverse credit if that applies.
Is a transfer of equity the same as remortgaging?
Not necessarily. A transfer of equity changes ownership and is often handled with the existing lender if the mortgage amount does not need to change. If a new mortgage is needed, for example because one person is buying out the other, it is usually combined with a full remortgage or product transfer.