Transferring Home Loans to Another Person

Sometimes, you might want to transfer a mortgage—for example:

• Taking over a parent’s loan
• Transferring a loan to a family member or friend
• Swapping loan responsibility after a relationship breakdown

1. You Can’t Simply Take Over a Mortgage

• Lenders must assess the new borrower before approving a loan.
• Usually, this means you apply for a new home loan, which pays out the existing mortgage.

Tip: Always check with the lender or a mortgage broker first.

2. Assumable Mortgages (Very Rare)

• These allow you to take over a mortgage without repaying it upon sale.
• Modern mainstream lenders rarely offer these anymore.

3. Property Ownership Transfer

• Lenders typically require the property to be transferred first before transferring or refinancing the mortgage.
• This usually triggers:
  • Stamp duty
  • Capital gains tax (CGT)
  • Other fees

Ways to reduce costs:

• Favourable purchase arrangement: Sell the property to a close person at the same price as the remaining loan.
  • Pros: Avoids real estate agent costs
  • Cons: Government costs like stamp duty may still apply
• Gifting property to family members: May avoid stamp duty in some jurisdictions
  • But CGT could apply if the property isn’t your main residence

4. Common Fees Involved

Even if ownership is transferred at no cost or below market value, you may still face:

Fee Type	Notes
Stamp duty	Usually based on market value, not sale price
Capital Gains Tax (CGT)	Applies to investment properties or non-PPR
Break fees	If you end a fixed-rate mortgage early
Valuation fees	Paid if lender requires a new property valuation

5. Other Considerations

• Transferring property can have financial, tax, and social security implications.
• It may affect your eligibility for entitlements like the aged pension.
• Professional advice from a financial adviser, accountant, or solicitor is essential before proceeding.

Key takeaway:
You can’t just hand over a mortgage to someone else. Even family transfers usually involve:

• New loan applications
• Property transfer
• Fees and taxes

Planning carefully and seeking professional advice is essential to avoid unexpected costs or legal issues.

General Advice & Credit Assessment Disclaimer

The content in this post is for general informational and educational purposes only. It should not be taken as personal credit or financial advice. Before making any decisions regarding a home loan, mortgage, or financial product, you should assess whether the information is appropriate for your specific needs, financial situation, and personal objectives.