Mortgage against a property under a Life Interest Trust

Just wondering if anyone might be able to assist here. It may well be a silly question but here goes…

Husband and Wife
Tenants in Common with Life Interest Trusts written into their Wills.
Husband passes away and wife remains in the property for the rest of her life.
Question: Are the children as trustees and ultimate beneficiaries (remaindermen) able to borrow against the Husbands half of the property in order to undertake renovations? (Borrowing would probably constitute a mortgage of some kind)

The following clause is written into the Will which would lead me to suggest that they are unable to do so, unless the Life Tenant provides consent or borrows in her name as the survivor;

(b) The House shall not be sold during the lifetime of the said Occupant without her consent but she shall pay all outgoings and keep in good repair and insured to the satisfaction of my Trustees.

Any assistance would be much appreciated.


Henry Straw
April King Legal

I have come across problems with mortgages and IIPs before. The first problem is finding a mortgage company that will lend where there is a trust arrangement like this in place. They would almost certainly insist that the life tenant is jointly and severally liable. There is a further issue in that under the terms of the trust, the life tenant pays income nature expenses (so interest re-payments on a mortgage, presumably), but not capital amounts (repayment on principal sum borrowed?). Finally, the concept of “benefit & burden” staying together would suggest that the remaindermen should take on the debt, as they are the true beneficial owners of the property, at least long term (and mortgages are long term things), but the life tenant is then vulnerable to foreclosure if they fail to keep up the payments. My view would be that Life Interest Trusts and mortgages should never co-exist.

Lisa Davies

Thanks for your reply Lisa. I am minded to agree with you that they should never co-exist.

Appreciate your thoughts.

Henry Straw
April King Legal