Property Saviour logo
Call Me Back, Please

Can You Sell Your House Before Paying Off The Mortgage?

Property Saviour » Mortgages » Can You Sell Your House Before Paying Off The Mortgage?

Can you sell your house before paying off the mortgage?

You absolutely can.  Many sellers do sell their homes before the end of their mortgage term.

A change in circumstances triggers a sale, whether it is a relocation, higher interest rates, or you are simply looking to downsize.

If you sell before the mortgage term ends, it can result in early redemption charges.  In this article, we’ll share practical tips that you can use.

Table of Contents

Can You Sell a House with a Mortgage?

You can still sell your house, even if you haven’t paid off your mortgage yet. Many people choose to move before they have finished making all their payments.

Unfortunately, you won’t be able to keep all the money from the sale – your remaining loan balance must be taken care of first.

You will also pay the mortgage for the month that the sale of your house will complete.

Selling Your House Before the Mortgage is Paid
Be mindful that estate agents tend to over-value a property in order to win your instruction and then reduce it until it eventually sells. 

How do I work out my mortgage settlement figure?

When your sale is ready to complete your solicitor will request a mortgage redemption figure from your lender.  This will include the mortgage balance that needs to be redeemed on that day along with any interest and charges.

How do I determine how much equity is in my home?

To calculate your home’s equity, simply take the value of your home and subtract any amounts owed on the property. The result will be the amount of equity you have. For instance, if your property is valued at £500,000 and the total mortgage balances owed on the property are £300,000, then your equity would be £200,000.

Getting a valuation should be your priority if you need to sell the property to pay off your mortgage. This will tell you what price you can expect to achieve for your property by evaluating the house and comparing it to other properties sold in the area.


It is worth mentioning that estate agents tend to over-value a property in order to win your instruction and then reduce it until it eventually sells.  While this strategy can work wonders in a seller’s market, in a buyer’s market, it is unlikely to succeed.

Selling a house before the mortgage is paid in the UK depends on the valuation and your lender’s redemption figures, including all the charges.  If you are in financial difficulties and facing a repossession, they may well accept a lower amount.

Will You be Able to Repay Your Mortgage Following the Sale?

Yes – If the market valuation is high and you could pay off your mortgage loans in full after selling the property, it’s wise to start marketing it as soon as possible.

Talk to your estate agent to find out how long it’d take for your property to get sold. This is an important factor to consider, as you’ll be responsible for the mortgage payments until the sale has been completed.

Agree on fees with an estate agent upfront.  When a buyer is found, your estate agent will work with your solicitor to pay off the mortgage.

Then, the funds will be used to pay off your remaining loan balance as well as any other outstanding fees. Once all the payments have cleared, you’ll be free of debt, and any remaining sale proceeds will be transferred to you.

If you need to sell quickly for some reason, you can consider working with a quick house sale company such as Property Saviour.

You won’t get the full market value, but the sale will be completed in 10 days or quicker with no fees to pay.

Sell with certainty & speed

Should I pay off the mortgage or port it?

If you are wondering what happens to your mortgage when you sell your house in the UK, you have two options:

  • paying off the mortgage
  • or porting it to another property.

Porting a mortgage is the process of transferring your existing mortgage deal to a new property. 

When should I port my mortgage?

  1. If you are content with your existing mortgage deal and don’t want to change it.
  2. If you are not yet in the initial deal term of your mortgage, you won’t have to pay early repayment charges.
  3. If your property valuation is not enough to cover your mortgage debts, you can comfortably make your mortgage payments each month.

When should I pay off my mortgage?

If your property valuation is enough to cover the mortgage debt.

If your current mortgage payments are too expensive and you want to look for a new deal or sell the property as is.

Can You Sell a House with a Fixed Mortgage
It's important to note, however, that there is usually a penalty charge of 3-5% of the loan amount if you want to end the fixed-term agreement before it ends.

Can You Sell a House with a Fixed Mortgage?

Fixed-rate mortgages can provide a lot of stability, as the interest rate will remain the same over some time – typically between two and five years. This means that mortgage payments won’t fluctuate, regardless of any changes to the Bank of England’s base rate.

The benefit of fixed rates is that they protect borrowers from base rate increases. However, borrowers also don’t benefit from base rate drops.

Fortunately, most fixed-rate loans are portable, meaning that you can transfer the mortgage to a new property without compromising on the terms. This is a great advantage as you won’t be forced to make early repayments to your lender when you move.

It’s worth mentioning that there is usually a penalty charge of 3-5% of the loan amount if you want to end the fixed-term agreement before it ends.

Can You Sell a House with a Reversion Plan?

Reversion plans offer a way to access the equity of your home without having to sell it.  It is also called a lifetime mortgage.

The plan allows you to withdraw a portion of the equity in one lump sum or over time. You can also use the loan to receive monthly payments.

As a reversion plan is part of an equity release scheme, their interest rates are compounded.  Reversion mortgages can be repaid at any given point; however, there may be additional fees to be paid.

If you want, you can sell the property, and you will be responsible for settling the outstanding mortgage payments with the proceeds from the sale.  Whatever is left over after all the mortgage payments have been made is yours to use however you please.

Pros of selling your house before the mortgage is paid off

  • If you’ve fallen behind on your mortgage payments, you can avoid the repossession of your house by selling it and settling the debt.
  • If a change in circumstances has made your mortgage payments too expensive to manage, you can get a more affordable deal on a cheaper property by selling.
  • If your property’s worth is enough to cover the costs of the mortgage debt, you’ll have successfully paid it off and be free of debt – a huge relief. You may even be left with some money to put towards a new home.

Cons of selling your house before the mortgage is paid off

  • If your property valuation is low and your existing mortgage payments are too high to cover, making the payments can be very difficult. If you cannot make the payments, you will be in mortgage arrears.
  • This can be both expensive and stressful, and your lender may take legal action against you if payments aren’t made.  This will affect your credit score.
  • You are responsible for making mortgage payments until the sale is complete, even if you have moved out of the property. As a result, you may be temporarily homeless until the house is sold.
Additional costs when selling a house before mortgage is paid
Early repayment charges.  There won't be any if you're on a standard variable rate (SVR) rather than on a fixed-term mortgage.

Additional costs when selling a house before mortgage is paid

There are a few extra costs to bear in mind when selling a property before the mortgage is paid off. These include:

  1. Valuation fee;
  2. Estate agent fees (if you’re using one to sell);
  3. Early repayment charges.  There won’t be any if you’re on a standard variable rate (SVR) rather than on a fixed-term mortgage.
  4. Solicitor fees.
  5. Moving and storage fees.

Sell To Us!

If you’re considering selling your house before the mortgage is paid off and need a quick sale, contact our friendly team to get a cash offer.

We’ll make it simple and easy for you.

Sell with certainty & speed

auction hammer

Property Saviour Price Promise

  • The price we’ll offer is the price that you will receive with no hidden deductions.
  • Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
  • These valuations or surveys result in delays and price reductions later on.
  • We are cash buyers.  There are no surveys.
  • We always provide proof of funds with every formal offer issued.
calculator

We'll Pay £1,500 Towards Your Legal Fees

  • No long exclusivity agreement to sign because we are the buyers.
  • You are welcome to use your own solicitor. 
  • If you don’t have one, we can ask our solicitors for recommendations.
  • We share our solicitor’s details and issue a Memorandum of Sale. 
Sell

Sell With Certainty & Speed

  • Our approach is transparent and ethical, which is why sellers trust us.
  • 100% Discretion guaranteed. 
  • If you have another buyer, you can put us in a contracts race to see who completes first.
  • Complete in 10 days or at a timescale that works for you.  You are in control.
Share This Article:

Related Articles

Skip to content