Can I put my mortgaged property into trust?

If your property has a mortgage on it - don’t worry you can still protect it with a Trust.

Property trusts on property without mortgages must have the legal title in the name of the trustees. This means that, for the trust to be registered correctly, the legal owner needs to transfer their title to the trustees.

However, if there is a mortgage on the title, the lender has the ultimate say over any transfer of legal title and will almost always refuse to pass title from the mortgagor to their chosen trustees.


Instead of changing legal title, we keep settlors of mortgaged properties in possession of their legal title. They then create a declaration of trust which dictates that their remaining equity is to be held for the trust. A “restriction” in favour of the trust is made with the Land Registry with a charge in favour of the trust which takes effect after the sale of the property and the mortgage lender’s own first charge on the deeds has been satisfied. This keeps the trust’s interest in the net sale proceeds securely registered.

All the benefits of a standard Trust on a property will then be able to be enjoyed by property owners with mortgages and legally the mortgage company does not need to be advised or involved.

There is therefore no need to let the fact you have a mortgage prevent you from setting up a property Trust as part of your estate planning: just speak with us – we will show you how.