Mortgage guide
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.
- Published
- 17 Aug 2026
- Last reviewed
- 17 Aug 2026
- Reading time
- 2 min
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.
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Private mortgage criteria
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Criteria | Detail |
|---|---|
| Borrowers | Personal names, limited companies, an LLP, trusts and offshore structures |
| Repayment type | Interest only, repayment, or part and part |
| Term | Up to 40 years on residential lending in our experience; each lender sets its own maximum |
| Minimum loan size | Set by each lender; some private banks and large loan lenders have a minimum loan size |
| Maximum loan to value (LTV) | Set by each lender for the borrower and the security |
| Income types considered | Salary, bonus, dividends, investment income and foreign currency income |
| Assets under management (AUM) | Required by some private banks; others offer dry lending without AUM |
| Residency | UK residents, expats and foreign nationals |
| Credit approach | Bespoke underwriting with manual assessment |
| Locations | England, Wales, Scotland and Northern Ireland |
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Feature | Detail |
|---|---|
| Product fee | From £0-£995 |
| Type | Residential |
| Rates | From 4.59% |
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- Area:
- West Midlands
- Loan size:
- £92,000
Frequently asked questions
Can a private individual lend me money for a mortgage?
Yes. A private individual can lend money secured against property, but the arrangement can carry legal and regulatory considerations, including whether the lender needs Financial Conduct Authority (FCA) authorisation to enter into a regulated mortgage contract. Both sides need formal legal documentation, and a gifted deposit or a second charge may protect both parties better.
What is a private mortgage?
A private mortgage is a mortgage arranged through a private bank or a specialist private mortgage lender instead of a mainstream high street bank. Private mortgages are underwritten individually, which is why they are used by borrowers with large loan requirements, complex income, or wealth held in investments, businesses, trusts or overseas assets.
What is a private home loan?
A private home loan is a residential mortgage, arranged through a private bank or specialist lender, on a home the borrower will live in. It is used where income or wealth does not fit standard residential underwriting, for example for business owners, bonus-based earners and buyers of high-value homes.
Are private mortgages regulated?
A private mortgage secured on the borrower's own home is normally a regulated mortgage contract, overseen by the Financial Conduct Authority (FCA) in the same way as a high street residential mortgage. Lending for investment purposes can fall outside regulation, and where the borrower is a high net worth mortgage customer under the FCA definition some MCOB rules apply differently. Ask your adviser which protections apply to your arrangement.
Who are private mortgage lenders in the UK?
Private mortgage lenders in the UK are private banks and specialist private mortgage companies that lend outside high street criteria. Some accept applications only through intermediaries, so borrowers often reach them through a mortgage broker.
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