With a joint mortgage, both borrowers must agree to any changes to your existing mortgage. Those changes commonly include choosing a new deal, amending the term or changing the repayment strategy. If one of you loses mental capacity without a Lasting Power of Attorney (LPA), the other can't make any changes at all on their own.
When a fixed-rate or discount deal ends, the mortgage reverts to the lender's standard variable rate, meaning your monthly payments can rise sharply. And let's be honest: if the main breadwinner loses mental capacity, they certainly won't be working for a living any more. Your mortgage payments could rise drastically just when your income has dropped. Even if you both work, when a spouse or partner suddenly loses capacity, in many cases the healthy partner has to stop work to become a full-time, unpaid carer.
Bear in mind the warning every lender must give: "Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it." A Property and Financial Affairs LPA won't restore a loved one's capacity, but it would let their attorney agree a new mortgage deal and reach other assets, such as pensions and investments, that would otherwise be inaccessible.
Key Takeaways
- A joint mortgage is a joint contract. The lender needs both borrowers to agree a new deal, a remortgage or extra borrowing.
- If one borrower has lost capacity and has no LPA, the other borrower can't sign for them, even if you're married.
- When your deal ends, the mortgage usually moves to the lender's standard variable rate, which is often much higher.
- Selling or remortgaging a jointly owned home also needs both owners, or someone with legal authority to act for the one who can't.
- A Property and Financial Affairs LPA, made while you both can, avoids all of this. Without one, the route is the Court of Protection.
This guide covers England and Wales. Scotland and Northern Ireland have their own systems. It explains how LPAs work with mortgages and property, and isn't mortgage or financial advice.
How the problem happens
Picture a couple in their sixties. They bought their home together and have a joint mortgage with a five-year fixed rate, which ends in a few months. They've been meaning to look at a new deal.
Then one of them has a stroke, and is left without the mental capacity to understand or sign a mortgage application. Neither of them made an LPA.
When the healthy partner contacts the lender to arrange a new rate, they're told the lender needs both borrowers to agree. Because their partner can't, and nobody has legal authority to act for them, the lender can't go ahead. The fixed rate ends and the mortgage moves to the standard variable rate.
What it can cost
The standard variable rate is usually well above the rates on new deals. As a purely illustrative example, on a £150,000 repayment mortgage with 15 years left:
| Interest rate (illustration only) | Monthly payment (approx.) | |
|---|---|---|
| New fixed-rate deal | 4.5% | £1,150 |
| Lender's standard variable rate | 7.5% | £1,390 |
That's around £240 a month, or almost £2,900 a year, more. Actual rates vary between lenders and change over time, but the gap between a new deal and a standard variable rate is often this large. And it keeps going, month after month, until someone with legal authority can sign a new deal.
It's not just the mortgage rate
The same block applies to anything that needs both owners or both borrowers:
- Switching lender or remortgaging, for example to release money for care or home adaptations
- Borrowing more on the mortgage
- Selling the house, for example to move somewhere more suitable or to pay for care. A jointly owned home is held on Trust by its owners, so both must sign the sale. If one can't, someone with legal authority must sign for them.
- Dealing with the bank. Some banks restrict joint accounts once they know one holder has lost capacity, and accounts in that person's sole name are out of reach without legal authority.
What happens without an LPA
Being married or in a civil partnership doesn't give you the right to sign for your partner. The only way to get that authority, once capacity has gone, is to apply to the Court of Protection, either to be appointed deputy or for an order allowing a particular transaction, such as selling the house.
That involves forms, medical evidence, court fees and often legal fees. It commonly takes many months, and the higher mortgage payments continue the whole time. A deputy also has to take out an insurance bond, pay annual supervision fees and report to the Office of the Public Guardian every year.
How an LPA solves it
With a registered Property and Financial Affairs LPA, your attorney can sign for you. When your deal ends, they can agree a new one with the lender alongside your partner, just as you would have done together. They can also deal with a remortgage, a sale or your bank.
Most lenders accept a registered LPA, though each has its own process, and some will want to see the original or a certified copy.
If your partner is both co-owner and attorney
Many couples appoint each other as attorneys. That works well for a new mortgage deal. For a sale, there's a technical rule: the money from selling a property held on Trust usually has to be paid to at least two people (Trustees). If your partner is signing both for themselves and as your attorney, a second person may need to be appointed. Your conveyancer will explain this if it applies.
This is a good reason to name more than one attorney, or a replacement attorney, such as an adult son or daughter. We'll talk this through with you when we prepare your LPAs.
Make your LPAs together, now
The answer for most couples is simple: each of you makes a Property and Financial Affairs LPA, usually appointing each other, with someone else as well or as a replacement.
An LPA can only be made while you have mental capacity, so it has to be done before anything happens. Registration also takes at least 12 weeks in our experience, and longer if a form is sent back for a mistake (see why LPAs get rejected). If your fixed rate ends in the next year or two, now is the time.
Frequently asked questions
Can I remortgage if my husband or wife has dementia?
Only if they can still understand and agree to it themselves, or if someone has legal authority to act for them, under a registered LPA or a Court of Protection order. Being married doesn't give you that authority.
Will the lender let me switch deals on my own?
Not usually. A joint mortgage is a joint contract, so lenders need both borrowers, or an attorney or deputy acting for one of them, to agree a new deal.
What if only one of us is named on the mortgage?
The same problem applies, just more simply. If the only borrower loses capacity without an LPA, nobody can agree a new deal for them.
Does a Health and Welfare LPA cover my mortgage?
No. Mortgages, property and bank accounts are covered by a Property and Financial Affairs LPA. Our guide to the two types of LPA explains the difference.
Do we need separate LPAs as a couple?
Yes. Each LPA is made by one person. Couples usually make one each, often appointing each other, and many make both types of LPA. Ours are £75 per LPA, or £140 for both types for one person.
The short version: a joint mortgage needs two signatures
A joint mortgage only works while both of you can sign, or someone has the legal authority to sign for you. Without an LPA, losing capacity can leave your partner stuck on a higher rate, unable to remortgage, move or sell. Two Property and Financial Affairs LPAs, made now, keep your options open. If you have a drawdown pension, read why you need an LPA for pension drawdown too.
Every LPA we prepare is checked by our Will Team and comes with your own personalised Signing Guide, showing everyone exactly where and in what order to sign. Find out more about Lasting Powers of Attorney.
About this guide
This guide was written and checked by the Downloadawill Will Team. It explains the law in general terms and isn't legal, mortgage or financial advice for your own situation. Lenders have their own procedures, so check with yours. The interest rates in the table are an illustration only. Downloadawill is a trading style of Direct Wills. All our Will Writers are Members of The Society of Will Writers. We've been writing Wills and Lasting Powers of Attorney for people in England and Wales since 1997. Read more about us.
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