Mortgage loans from private individuals

A mortgage loan from a private individual is an arrangement where a person, often a family member or private investor, lends money secured against a property instead of a bank. These privately funded arrangements sit outside mainstream mortgage products and carry legal and regulatory considerations for both parties, including whether the lender requires FCA authorisation for regulated mortgage contracts.

Private individual lending is sometimes used within families, for example parents supporting a purchase. Where family money is involved, there are often better-protected alternatives, such as gifted deposits, joint borrower sole proprietor mortgages, or a formal second charge, that keep the main mortgage with a regulated lender.

If you are considering lending or borrowing privately against property, we can explain how the arrangement would interact with mainstream and private mortgage lending, and where formal legal advice is required.