Can You Remortgage a SIPP Property?

Yes — remortgaging commercial property held in a SIPP is entirely permissible and is a regular occurrence in the SIPP property market. Common reasons to remortgage include:

• Expiry of a fixed rate term — moving from a fixed rate to a new deal at the end of the fixed period
• Seeking a better rate — if market conditions have improved since the original mortgage was taken out
• Releasing equity — if the property has appreciated in value, a higher loan (subject to the 50% NAV cap) can release cash into the SIPP for reinvestment or income
• Changing lender — if a new lender offers more competitive terms or a more suitable product structure
• Restructuring from interest-only to capital repayment (or vice versa)

The process is similar to the original mortgage application but typically faster, as the SIPP's track record of property ownership and income is already established.

The HMRC 50% borrowing limit applies equally to remortgages. Any new or increased borrowing must not cause total SIPP liabilities to exceed 50% of the fund's net asset value at the time the new mortgage is drawn.

This has important implications for equity release remortgages. If the property has appreciated significantly, you may wish to take out a larger loan to release cash into the SIPP. However, this is only permissible if the new total borrowing stays within 50% of the whole SIPP's NAV (including the now higher property value).

Example: SIPP with a property now valued at £600,000 (originally purchased for £400,000) and a residual mortgage of £150,000. SIPP total NAV = £600,000 (property) + £50,000 cash = £650,000. Maximum total borrowing = £325,000. Available additional borrowing = £325,000 - £150,000 = £175,000 could be released as additional loan proceeds. Use our SIPP LTV Calculator to model your specific position.

A SIPP remortgage involves the same parties as the original mortgage: the SIPP provider, a specialist SIPP mortgage broker, and the new lender. The SIPP provider will need to approve the new mortgage in their trustee capacity, and the new lender will require a current valuation of the property.

Key steps:

• Initiate early — start the remortgage process at least 3–4 months before your current fixed term expires to avoid reverting to the lender's standard variable rate
• Commission a new valuation — lenders require a current RICS valuation
• Obtain SIPP provider approval — the trustee must approve the new mortgage arrangement
• Legal work — the new mortgage deed must be executed by the SIPP trustees; a solicitor is required
• Simultaneous repayment — the old mortgage is redeemed from the new mortgage proceeds on the same day

If you are considering remortgaging before your current fixed rate term expires, check whether your existing mortgage has early repayment charges (ERCs). These can be substantial — typically 1–5% of the outstanding loan — and can make early remortgaging economically unattractive.

Our team will always model the ERC cost against the interest saving from a lower new rate before recommending a remortgage during a fixed term. For products without ERCs (typically trackers or variable rates), remortgaging at any time is straightforward.