A 64-year-old man earning over £100,000 a year and living in a £3 million home has been warned against remortgaging to secretly repay a £70,000 debt to his father, after hiding the borrowing from his wife. Consumer champion Sarah Davidson told the reader, named Gerry, that lying to a mortgage lender about the purpose of the loan would be illegal.
The Debt and the Dilemma
Gerry earns £110,000 annually and lives with his wife in a five-bedroom house in Berkshire worth around £3 million. He told Metro that two years ago he made a private investment without telling his wife, which went badly wrong. He borrowed £70,000 from his dad, believing he could repay it from his annual bonus, but the bonus was smaller than expected and his father now needs the money back to move house.
Gerry has kept up every mortgage and credit-card payment but constantly moves money around before his wife sees statements. He asked whether he could borrow slightly more than the £70,000 through a further mortgage advance and tell his wife it was for home improvements.
Why the Plan Is Illegal
Davidson responded that the proposal would turn a personal debt into a joint debt secured against a jointly owned family home, affecting his wife's equity, mortgage commitments and future financial credibility. She said that even if the mortgage were solely in his name, taking more debt against the home without an honest conversation would be "morally, pretty low" and "also illegal."
She noted that the Financial Conduct Authority requires lenders to assess whether a varied mortgage contract is affordable, considering net income, committed expenditure and ordinary household costs, and that accurate answers about borrowing and existing commitments must always be given.
Advice: Gather Evidence and Confess
Davidson advised Gerry to download the last 12 months of statements for every account, card, loan, investment and mortgage, and to write down the amount owed to his dad, any interest, the repayment deadline and original terms, along with every direct debit, school fee and regular cost commitment. She recommended confidential, free debt advice from StepChange or through MoneyHelper's debt advice locator.
She then urged him to confess to his wife at a time when the children are not around, starting with the truth: "I made an investment without telling you. It failed. I borrowed £70,000 from my dad. I have taken debt advice and I want us to look at the full picture together."
Davidson concluded that remortgaging may be the right option, but doing so behind his wife's back and lying to his lender is not the way to go about it, and that both conversations need to happen now.
