What is the six-month rule for CML mortgage lenders?

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Six month mortgage rule

Quite simply put, if you purchase a property with or without a mortgage most lenders will require that you own the property for 6 months prior to being able to sell/raise additional funds/re-mortgage within this timescale. Whilst the six month rule is not the law in the UK it’s a CML guideline that each lender can choose to adhere to or not. The idea of the 6 month rule is to protect both the lender exposure with any potential mortgage fraud, it is also about protecting the consumer against distressed sales.

Lenders who will consider the refinance prior to 6 months ownership often will only re-mortgage based on the original property value or the property value plus cost of any refurbishments.

So, for the property investors looking to do a quick property flip, there are 2 main options – either purchase in cash or take out a bridging loan to purchase the property, complete the refurbishments, and then sell at a higher value.

To summarise, getting a mortgage is a long term commitment not designed to be used as a short term finance option and is designed for the investors who are looking for the longer term rental income and capital growth.

Give us a call on 01925 711 558 if you have more questions.

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