What is a marine mortgage?
A marine mortgage is a loan secured against a vessel in which the borrower retains ownership from day one. The lender holds a legal charge (the 'mortgage') against the vessel - registered on the UK Ship Register for UK-flagged vessels. This distinguishes it from hire purchase, where the lender owns the vessel until the final payment.
Marine mortgages are used for: narrowboats and inland waterway vessels (especially liveaboard residential use), sailing and motor yachts above £100,000, houseboats and floating homes, and commercial vessels where longer-term finance is appropriate.
Marine mortgage vs hire purchase - the comparison
Hire purchase: lender owns vessel during term. Title transfers on final payment. Terms typically 5-8 years. Higher monthly payments. No need for solicitors or formal mortgage registration.
Marine mortgage: buyer owns vessel from day one. Lender holds a registered charge. Terms typically 10-15 years. Lower monthly payments. Requires maritime solicitors and formal security registration on the Ship Register.
The choice depends on the vessel value and the buyer's priorities. For a £50,000 narrowboat, hire purchase is simpler and faster. For a £300,000 sailing yacht used as a liveaboard, a marine mortgage at 15 years produces significantly lower monthly payments.
Who issues marine mortgages?
Marine mortgages are issued by specialist marine lenders - not by high-street banks or building societies. The principal UK marine mortgage lenders include Arkle Finance (inland waterways specialist), Lombard (leisure and commercial marine), Shawbrook Bank (commercial vessels), Close Brothers Aviation & Marine (superyachts and leisure yachts), and Weatherbys Bank (HNW leisure marine).
As an independent broker, DBF has relationships across this specialist panel and presents the full market - not a single lender's product.
LTV and how marine mortgages are valued
Marine mortgages are based on the vessel's surveyed open market value - not the purchase price. The advance (loan amount) is calculated as a percentage of this surveyed value. Typical LTVs: leisure yachts in good condition: 70-80%. Narrowboats and inland waterway vessels: 70-75%. Liveaboard residential vessels: 70-75%. Superyachts: 50-65%.
The survey is conducted by an accredited surveyor (RINA or IIMS). The cost is the borrower's responsibility - typically £400-£2,000 depending on vessel size.
The legal process for a marine mortgage
Unlike a residential mortgage, a marine mortgage is not registered at HM Land Registry. For UK-flagged vessels, the marine mortgage is registered as a Statutory Ship Mortgage on the Part 1 of the UK Ship Register (managed by the Maritime and Coastguard Agency).
This registration process requires maritime solicitors - specialists in ship mortgage law distinct from residential property solicitors. The registration creates a public legal charge against the vessel that takes priority over other creditors.
For foreign-flagged vessels (Cayman, Malta, Channel Islands), the security registration process differs by flag state but is equally formal and requires specialist legal advice.