Selling a House with a Mortgage: What Happens to the Debt?

This is general information, not legal or financial advice. Mortgage products, early repayment charges, and lender rules differ. Check GOV.UK: How to sell a home and speak to your lender and a solicitor or licensed conveyancer before you commit. My Savvi Home is a property advertising platform. We do not arrange mortgages or give lending advice.

Quick answer

Yes, you can sell a house that still has a mortgage. You do not normally pay the whole balance out of your own pocket before marketing. Your solicitor or licensed conveyancer asks your lender for a redemption figure, then pays that amount from the buyer's funds on completion day. Anything left after the mortgage, fees, and agreed costs is your equity.

Official guidance says you need enough money from the sale (or other funds) to clear the mortgage, including any early repayment penalties: How to sell a home.

What “redeeming” the mortgage means

Redeeming means paying off the secured loan so the lender releases its charge on the title. Until that happens, the lender still has a legal interest in the property. Buyers and their conveyancers will not complete without a clear path to that release.

A redemption figure (sometimes called a redemption statement) is the lender's calculation of what it costs to clear the mortgage on a stated date. It usually includes:

• the outstanding capital balance
• interest up to that date (interest often accrues daily)
• any early repayment charge if you leave a fixed or special deal early
• any mortgage exit or administration fee the product allows

Because interest moves day by day, the figure is time-limited. If completion slips, your solicitor requests an updated figure.

Source for the redemption idea in the selling journey: GOV.UK How to sell a home (section on paying off your existing mortgage).

Step-by-step on a normal sale (England and Wales)

1. Decide to sell and price honestly. Know roughly what you owe and what similar homes achieve locally.
2. Instruct a solicitor or licensed conveyancer early. They can start title work and later request the redemption figure.
3. Market the property. Private sellers can advertise on My Savvi Home with a flat monthly fee and zero commission on the agreed price. Listings appear on mysavvihome.com today. Rightmove and Zoopla syndication is not currently included.
4. Accept an offer subject to contract. Nothing is binding yet in England and Wales until exchange.
5. Your conveyancer requests the redemption figure once dates look real.
6. Exchange of contracts locks the deal. Completion date is usually set then.
7. Completion day: the buyer's side sends funds. Your conveyancer pays the lender, settles agreed costs, and sends the balance to you. The charge is released and ownership transfers through the Land Registry process your lawyers handle.

Scotland and Northern Ireland use different selling practices. Use the national guidance that matches where the property sits, and instruct a local solicitor.

Early repayment charges (ERCs)

If you are still inside a fixed-rate, tracker, or other product period, redeeming early often triggers an early repayment charge. That can be a meaningful sum. GOV.UK's selling guide tells sellers to ask the lender or broker what they owe including possible penalties for early repayment.

Do not guess the charge from a blog. Ask your lender for a written illustration, or have your solicitor include it in the redemption figure conversation. Factor it into whether the move still works financially.

Porting vs redeeming

Some products let you port the deal to a new home (keep the rate features on a new advance, subject to underwriting). Porting is not automatic. Lenders re-check affordability and the new property. If porting fails, you usually redeem and take a new product.

If you hope to port:

• tell the lender early
• tell your conveyancer what was agreed in writing
• do not assume the sale and purchase can complete on the old terms without a fresh decision in principle

Negative equity

Negative equity means the property is worth less than the mortgage (and secured debts) you need to clear. GOV.UK notes this is uncommon for many sellers but serious when it happens: you remain liable for the shortfall if you sell.

Options people discuss with lenders and advisers include:

• waiting and improving the sale price if the market and your situation allow
• paying the shortfall from other savings on completion
• asking whether debt can move with you to a new property (lender discretion)

This is high-stakes. Get advice from your lender and a regulated adviser before you accept a low offer.

Other money that can come out of completion funds

Besides the mortgage, completion statements often allow for:

• your conveyancer's fees and disbursements
• estate agent commission if you used an agent (My Savvi Home charges a monthly listing fee instead of commission)
• leasehold packs or managing agent fees where relevant
• any other secured loans your solicitor has been told about

Tell your conveyancer about every charge secured on the title. Surprises at the end delay completion.

Private sale tip: advertise and redeem in parallel

Skipping an estate agent does not change mortgage redemption. It only changes how buyers find you.

A practical private-sale rhythm:

1. Check your approximate balance and any ERC risk with the lender.
2. Order or confirm a valid Energy Performance Certificate before marketing.
3. List on My Savvi Home and instruct your solicitor the same week.
4. Keep viewings and negotiation yourself.
5. Let the lawyers run redemption, exchange, and completion.

Checklist before you accept an offer

1. Rough equity: likely sale price minus mortgage, ERC estimate, legal fees, and move costs.
2. Written note of any second charge or secured loan.
3. Confirmation your solicitor is instructed and has ID documents.
4. Clarity on whether you are buying elsewhere and need simultaneous completion.
5. Read GOV.UK How to sell a home finance sections again if anything feels unclear.

Talking to your lender without slowing the sale

Call or write to your lender (or broker) once you are serious about selling, not the night before exchange. Ask for:

• an indicative balance and whether an early repayment charge applies
• whether the product can be ported, and what underwriting steps that needs
• how many working days they need to produce a formal redemption figure for your solicitor

Keep the answers in writing. Forward them to your conveyancer. Private marketing on My Savvi Home can start while that conversation is open, as long as your pricing still works after fees and any ERC.

If you are buying and selling together, tell both conveyancers early. Simultaneous completion needs clean redemption timing on the sale and mortgage offer timing on the purchase. Chains break when one side discovers an ERC or shortfall late.

If your buyer needs a mortgage, their valuation can still affect price after you have agreed terms. That risk exists whether you used an agent or listed privately. Build a little margin into your plans so a mild valuation gap does not wipe out the equity you need after redemption.

Bottom line

A mortgage does not block a sale. Your conveyancer pays the lender from completion money using a redemption figure. Watch early repayment charges and negative equity. Marketing on My Savvi Home is separate from clearing the loan.

Not financial or legal advice. Confirm figures with your lender and instruct a regulated professional for your facts.