A Guide to Selling a House with a Mortgage
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Content Written By: Kirsty Rowett - Last Updated: 18/06/2026
Selling a house while you still have a mortgage is extremely common.
The good news is that having a mortgage doesn't usually stop you from selling your home. However, depending on your mortgage deal, there may be costs involved if you're still within a fixed-rate period, so it's important to understand how your mortgage will be repaid and what options are available if you're moving home.
This guide covers everything you need to know, including the steps involved, potential fees, mortgage porting and what happens if you're in negative equity.
Key Takeaways
You can usually sell a house with a mortgage, even if you're still within your mortgage term.
Your mortgage is typically repaid using the proceeds of the sale on completion.
Before selling, request a mortgage redemption statement to understand exactly how much you owe and whether any early repayment charges (ERCs) apply.
If you're buying another home, you may be able to port your existing mortgage and keep your current rate.
Selling in negative equity is possible, but you'll usually need your lender's approval and may have to repay any shortfall.
If you need to move quickly, selling directly to a cash house buyer can help you avoid chains and lengthy delays.
Can you sell a house with a mortgage?
Yes, you can sell a house with a mortgage or an outstanding mortgage balance. Having an outstanding mortgage does not prevent you from putting your property on the market or accepting an offer.
The UK Government outlines the two options you have as a homeowner with a mortgage:
Move the mortgage to your next house or flat (known as ‘porting’ your mortgage)
Pay off your mortgage (usually with profits from your house sale and usually before you buy your next home)
How to sell a house with a mortgage
The process of selling a house with a mortgage is very similar to selling any other property, although there are a few additional steps to consider:
Step 1: Request a mortgage redemption statement
One of the first things to do is contact your lender and ask for a redemption statement. This will help you understand how much you need to repay on completion, including any early repayment charge or exit fee.
Many fixed-rate and discounted mortgage products include early repayment charges (ERCs). These charges can range from a small percentage of the remaining balance to several thousand pounds, depending on your mortgage terms.
Step 2: Decide whether to move your mortgage or take out a new one
Next on the list is deciding whether you keep your existing mortgage deal, move it to your next property, or take out a new mortgage. The right option for you will depend on costs, rates and whether you pass affordability checks.
Step 3: Instruct a conveyancing solicitor
A conveyancing solicitor handles the legal side of the sale. They will liaise with your mortgage lender, request the redemption statement, manage contracts and ensure the mortgage is repaid correctly on completion.
Step 4: Complete the sale and repay the mortgage
Once contracts have been exchanged and completion takes place, your solicitor will use the sale proceeds to pay off the mortgage.
If you’re taking out a new mortgage on your new property, you’ll start paying the new rate. If you’re porting your mortgage, you’ll remain on the same terms in your new home.
Do you need to tell your mortgage lender you are selling?
You do not usually need formal permission to sell your property. However, your lender will need to be involved during the conveyancing process because they must provide a redemption statement and release their legal charge once the mortgage has been repaid.
If you're considering porting your mortgage to a new property, it's worth speaking to your lender early to understand your options.
Can you sell a house with negative equity?
Selling a house in negative equity can be more challenging. Negative equity occurs when your mortgage balance exceeds your property's value. For example, if you owe £220,000 but your home sells for £200,000, you'll have a £20,000 shortfall.
You may still be able to sell, but you'll need your lender's approval. Some lenders won't allow a sale below the outstanding mortgage balance, meaning you may need to wait until you've paid more off your mortgage or your property's value increases. Before speaking to your lender, it may be worth seeking guidance on the support and options available to you.
If your lender agrees to the sale, you'll need to repay the shortfall not covered by the proceeds; this may be required as a lump sum or through a repayment plan. Failing to repay the shortfall could lead to legal action, although support schemes may be available if you qualify.
Porting a mortgage while in negative equity is sometimes possible, particularly if you're moving to a lower-value property. However, lenders rarely approve porting if the value of the new home exceeds your negative equity.
Negative equity can also make it harder to secure a new mortgage deal, although some lenders may still consider your application, often at higher interest rates.
What is mortgage porting?
Mortgage porting allows you to transfer your current mortgage deal to a new property when you move home. It can be a good option if you're on a competitive interest rate that would be difficult to secure today.
In simple terms, you're taking your existing mortgage deal with you rather than switching to a new one. This can help you avoid early repayment charges (ERCs), provided the sale and purchase are completed within your lender's required timeframe.
However, porting isn't automatic. You'll need to reapply with your lender, who will assess your finances and the new property's value before approving the transfer.
How mortgage porting works
Despite the name, a ported mortgage isn't simply moved from one property to another. Your lender will carry out affordability checks and make sure the new property provides suitable security for the loan.
If you're buying a more expensive home, you may need to borrow additional funds. If you're moving to a cheaper property, you could face early repayment charges on the portion of the mortgage you're paying off.
Should you port your mortgage or take out a new one?
The right option depends on your current mortgage deal, the rates available today and your future plans.
Porting your mortgage may be worth considering if you're on a competitive fixed-rate deal and would face an early repayment charge by switching lenders. It allows you to keep your existing rate, although you'll still need to meet your lender's affordability criteria.
Taking out a new mortgage could be the better option if lower rates are available elsewhere or your current lender cannot offer the borrowing amount you need. However, you should factor in any early repayment charges and arrangement fees before making a decision.
Comparing the total cost of both options can help you determine which offers the best value over the long term:
| Pros | Cons |
|---|---|
| Retains your current interest rate, which may be lower. | You’ll need to reapply and could be denied if your finances have depreciated. |
| Avoids ERC payments. | If you’re upsizing or buying a more expensive property, your lender may not lend you more on top of porting. |
| Can often be more streamlined or simpler. | You can’t shop around for better deals. |
| Saves you time looking at other lenders. | You may have to pay an admin fee or valuation fee for your new property. |
| Helps you avoid periods with high interest rates and wait for them to drop. | You need to buy your next property within the lender’s approved window (usually 90-180 days) to avoid ERCs. |
| Maintains financial continuity. | You may not get competitive rates when porting or borrowing from the same lender. |
Paying Off Your Mortgage
| Pros | Cons |
|---|---|
| You can shop around for a better mortgage rate or product. | You may need to pay an ERC, from 1-5% of your remaining debt. |
| You can adjust your lending terms to suit your new situation (e.g. borrowing more for a bigger house). | You’ll need to go through affordability and credit checks, often paying legal fees for these. |
| If your fixed interest rate is about to change to an SVR, you could avoid a higher rate. | Switching mortgages usually takes more time and requires more steps. |
| You may get better terms after selling your house and increasing your equity. | You may end up on a mortgage with a higher interest rate due to the market. |
| You may be able to release equity when remortgaging to fund home renovations. | You may not get approval from your current lender and need to choose a different one. |
| You can shorten or lengthen your loan term to suit your new situation. | Shopping around with different lenders can be time consuming. |
Costs involved when selling a house with a mortgage
The cost of selling your house with a mortgage depends on your situation. It can cost you nothing or cost you thousands of pounds. Here’s a breakdown of the potential costs you might encounter depending on whether you port or switch your mortgage.
| Cost Type | Porting | Switching |
|---|---|---|
| Arrangement Fee | Maybe – if you’re increasing your borrowed amount | Highly likely |
| Exit Fee | No | Highly likely |
| Early Repayment Charge | Only if you’re porting part of your mortgage (you pay an ERC on the remaining portion) | Highly likely (usually 1-5% of the remaining loan) |
| Mortgage Valuation Fee | Highly likely | Possibly |
| Administration Fee | Likely | Likely |
How much will an early repayment charge cost?
The most expensive fee when selling a house with a mortgage is usually the ERC. This is because it varies so much depending on your loan agreement and remaining debt. As mentioned, an ERC will usually cost between 1% and 5% of your remaining loan balance.
You can use this early repayment charge calculator from Nationwide if you want to get an estimate, but you’ll need to talk to your mortgage lender for an accurate figure.
When might you get an early repayment charge on your mortgage?
You won’t always be charged an ERC on your mortgage. It can depend on your lender and situation. Typically, you’ll be charged an ERC when you:
Pay your mortgage off before the due date.
Overpay beyond the threshold (usually 10%) in one year.
Switch to a new mortgage deal before your due date.
Port your mortgage to a new property in more than 180 days.
Do a partial port of your mortgage to a new property and pay off the rest (you may be charged on the non-ported part).
Things to consider before selling a house with a mortgage
Selling a house with a mortgage isn't much different to selling a property you own outright. You can sell through an estate agent, at auction or to a professional cash house buyer. Before you put your property on the market, it's worth considering:
How much equity you'll have left after paying off your mortgage and selling costs
Any early repayment charges (ERCs) that may apply
Current property market conditions
Whether you plan to buy another home
If porting your mortgage could save you money
How quickly you need to move
Understanding the costs and timescales involved can help you make a more informed decision and avoid unexpected expenses later on.
Need to sell your house fast?
If time is a priority, selling on the open market may not be the best fit. Estate agent sales can take months to complete, and there's always the risk of chains collapsing or buyers pulling out.
At The Property Buying Company, we buy houses directly and can complete in a timeframe that works for you. There are no estate agent fees, no property chains and no waiting for a buyer's mortgage to be approved.
Get a free, no-obligation cash offer today to see how much your property could be worth and explore your options.
Frequently Asked Questions
Can you sell a house with a mortgage at any time?
In most cases, yes. However, you should check your mortgage agreement for any early repayment charges that may apply if you sell before the end of your current deal.
How is a mortgage paid off when you sell?
Your solicitor uses part of the sale proceeds to repay the lender on completion. Any remaining funds are then transferred to you.
Can you sell a house within 6 months of buying it?
Yes, although some lenders apply restrictions on properties that have been owned for less than six months. This can affect prospective buyers who require mortgage finance.
Do you need your lender's permission to sell?
Not usually. However, your lender must be involved in the process so they can provide a redemption statement and remove their charge once the mortgage has been repaid.
Edit Log
08/08/2025 - Content rewritten by Kirsty Rowett
08/08/2025 - Content updated in line with Editorial Guidelines (Reviewed by Mathew McCorry)
18/06/2026 - Content updated by Kirsty Rowett
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