Mortgage Debt After Death UK: Who Pays? Life Insurance, Joint Mortgages & Options 2025

When someone dies with a mortgage, the debt doesn't disappear. This guide explains who is responsible for paying the mortgage, how life insurance can help, and your options for dealing with mortgaged property after death.

Who Is Responsible for the Mortgage?

Joint Mortgage (Both Names on Mortgage)

Surviving borrower is responsible for FULL mortgage (not just half):

• Continue making monthly payments
• Cannot stop paying
• Lender can repossess if payments stop
• Your credit score affected if you miss payments

Sole Mortgage (Deceased Only Name)

Estate is responsible:

• Property usually sold to pay mortgage, OR
• Beneficiary takes over mortgage, OR
• Estate funds pay off mortgage
• If estate can't pay and property not sold, lender can repossess

Who Is NOT Liable

Family members NOT on mortgage are NOT legally liable unless:

• They're joint mortgage holder
• They guaranteed the mortgage
• They want to keep property (must pay or take over mortgage)

Mortgage Protection Insurance

Check if deceased had mortgage life insurance:

Types of Insurance

• Mortgage Protection Insurance: Decreasing term life insurance - pays off outstanding mortgage
• Life Insurance: Lump sum that can pay mortgage
• Critical Illness Cover: May have paid out if covered condition before death

Where to Look

• Mortgage offer documents
• Insurance policy documents
• Bank statements (monthly premiums)
• Contact mortgage lender (they often know)
• Check deceased's email

Making a Claim

• Contact insurance provider
• Provide death certificate, policy number, mortgage details
• Timeline: 4-8 weeks for simple claims, 3-6 months if medical queries
• Insurance pays directly to lender or to estate

Your Options for Mortgaged Property

Taking Over an Existing Mortgage

If beneficiary wants to keep property and take over mortgage:

Process

1. Contact lender and request "mortgage transfer"
2. Lender assesses YOUR affordability (income, credit, employment)
3. Provide: proof of income, bank statements, ID, grant of probate
4. Lender decision: approve transfer, decline, or require higher payments

If Lender Declines Transfer

• Apply for new mortgage in your name
• Use new mortgage to pay off deceased's mortgage
• Standard mortgage application process

Joint Mortgages: Surviving Borrower

If you had joint mortgage with deceased:

Immediate Actions

• Contact lender within 1-2 weeks
• Request 3-6 month payment holiday (bereavement support)
• Check for life insurance
• Notify buildings insurance

Long-Term Options

• Continue paying alone (if you can afford)
• Use life insurance payout to reduce/clear mortgage
• Sell and downsize (if can't afford payments)
• Get lodger to help with payments (if mortgage allows)
• Remortgage once sole owner (get better rate, reduce payments)

Dealing with Mortgage Arrears

If deceased had existing arrears:

• Arrears are part of estate's debts
• Must be paid from estate
• Lender can repossess if not paid
• Contact lender immediately - explain situation
• Request time (probate takes 3-6 months)
• Offer to make interest-only payments temporarily

Completing Mortgage Redemption

If paying off mortgage fully:

Steps

1. Request redemption statement from lender (exact amount, valid 4 weeks)
2. Pay redemption amount from estate/life insurance
3. Lender confirms mortgage closed
4. Lender informs Land Registry to remove charge
5. Download updated title register (£3) to confirm property clear

Early Repayment Charges

May apply if mortgage in fixed term (usually 1-5% of outstanding balance)

Frequently Asked Questions

Can I stop paying the mortgage after someone dies?

NO. If you're joint borrower, you must continue paying. If deceased was sole borrower, executor must arrange payment from estate or sell property. Stopping payments leads to repossession.

How long does the lender give before repossessing?

Lenders must follow FCA rules for bereaved customers - typically 3-6 months grace. But repossession process takes 3-6+ months from first missed payment to actual repossession. Contact lender immediately to avoid proceedings.

What if property is worth less than the mortgage (negative equity)?

Estate still owes shortfall after sale. Lender may write off small amounts or pursue estate for larger shortfalls. Lender cannot pursue beneficiaries personally unless they guaranteed mortgage.

Can I live in the property while probate is ongoing?

Yes, with executor permission. Mortgage payments must continue. Living there can reduce Capital Gains Tax if you later sell (Private Residence Relief).