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Buachaill, Barrister
Category: UK Law
Satisfied Customers: 10540
Experience:  Barrister 17 years experience
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Sir, Whether any limit is there in creation of number of

Customer Question

Sir, Whether any limit is there in creation of number of mortgages on a single property? Whether any opinion or permission is required from the mortgagee, if the mortgagor wants to create further mortgage on the same property to some other person?
Submitted: 1 year ago.
Category: UK Law
Expert:  Buachaill replied 1 year ago.

1. In theory, there is no limit to the number of mortgages which a person can attach to a specific piece of property. However, in practice, it is limited by two factors. Firstly, the value of the property. In terms of practical utility, there is no point in taking the security of a mortgage if there is no value in the property to which the security can attach. Accordingly, there is no point in being the third mortgagee if the value of the existing two mortgages exceeds the value of the property. Secondly, in order to grant an additional mortgage, the first or prior mortgagees generally have a clause in their mortgage, requiring either notice to be given to them, or consent of them obtained, in order to create any additional mortgages. So, the first ranking mortgagee can often contractually prevent subsequent mortgages being granted, if this is what they wish to do.