Can you sell a house with a mortgage?
Yes, you can sell a house even if you still have a mortgage. In fact, most homes in the UK are sold before the mortgage is fully repaid. The process involves using the proceeds from the sale to pay off your remaining mortgage balance. If your sale price is higher than your outstanding mortgage, the rest is yours to keep. If it's lower, you’ll need to cover the shortfall.
Selling a mortgaged home is common and perfectly legal. The process just includes a few extra steps and financial checks.
- You can sell your house at any time, even if you still owe on the mortgage.
- Your solicitor will handle repaying the lender from the sale proceeds.
- If you’re in negative equity, you’ll need to cover the shortfall.
- Early repayment charges (ERCs) may apply if you’re still within a fixed-term deal.
- You may be able to avoid ERCs by waiting, porting the mortgage, or using overpayment allowances.
- Selling with a mortgage is more complex but completely possible.
What happens to the mortgage when you sell?
When you sell your property, your mortgage is typically repaid in full using the money from your buyer. Your solicitor requests a “redemption statement” from your lender showing how much is owed, including any fees or early repayment charges.
At completion:
- Your solicitor sends the mortgage lender the full balance owed.
- Any leftover funds after fees and taxes go to you.
- The mortgage account is closed once the lender receives payment.
If you're buying a new home, you may also choose to port your mortgage — more on this below.
What if you're in negative equity?
Negative equity means your home is worth less than the mortgage you still owe. In this case, you can still sell, but you’ll need to:
- Cover the shortfall yourself, either from savings or another loan.
- Get approval from your mortgage lender, who may allow the sale if they agree with your plan for repaying the remaining balance.
Negative equity usually arises when property values drop or if you've borrowed a large percentage of the property’s value. It's common for those who bought with small deposits or during a market peak.
Will you have to pay early repayment charges?
If you’re still within the fixed or introductory period of your mortgage, you may face early repayment charges (ERCs). These can range from 1% to 5% of the remaining loan balance depending on your lender and how much time is left on your deal.
Can you avoid early repayment charges?
Yes, in some cases:
- Wait it out – if your fixed period ends soon, delaying the sale could save thousands.
- Port your mortgage – many lenders allow you to transfer your deal to a new property.
- Use your annual overpayment allowance – many lenders let you overpay up to 10% of your balance each year without penalty. If you're planning ahead, this can reduce your ERC and total balance by the time you sell.
Always ask your lender for a redemption statement to see exactly what the costs will be.
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Can you sell a house at any time?
Yes, legally, you can sell at any time. But timing matters for your finances. If you've just bought, your lender may apply ERCs, and your buyer might face issues with mortgage approval due to lender restrictions.You might also want to review other circumstances where timing plays a role in selling:
- What to do with your home after divorce.
- Do joint owners both need to sign to sell their property?
- Can jointly owned property be seized?
What if you're also buying another house?
If you’re moving home, your options include:
- Porting your mortgage – this lets you transfer your current mortgage to your new property, subject to lender approval.
- Getting a new mortgage – if you’re switching lenders or need a bigger loan, you’ll repay the old mortgage and start a new one.
- Using a bridging loan – this can help if you're buying before selling, but it's important to understand the costs. See our guide: What is a bridging loan?
Thinking about selling your home?
If you’d prefer to avoid the stress of managing mortgage paperwork, estate agents, or unpredictable chains, we can help.
- We offer just below market value in exchange for a fast sale.
- You’ll get a guaranteed cash offer within 48 hours.
- No legal fees when you use our partner solicitor.
- No fuss, just a fast, private sale.
- Flexible completion timelines.
Property owners are choosing Habello for a faster, easier and less stressful way to sell
Sell your home quickly for cash by accepting an offer just below market value. See how we compare to your other options by using the calculator below.
