06, June, 2023

Can I sell my house with a mortgage?

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Can I sell my house with a mortgage?
You can sell your house if you’re still paying your mortgage, but you will need to pay the mortgage back with some of the proceeds from the house when you achieve your sale. You can still apply for another mortgage for the house you’re looking to buy, but your lender will need to consider that you’re currently tied to a mortgage, even though you’ll pay this back when you complete your sale. 


63% of households in England own their own house, and of those homeowners nearly half of them are paying a mortgage. More and more homeowners are deciding that it’s time to move, with a large portion of them still paying their mortgage off. But are they able to sell their house before the mortgage is paid? We Buy Any House answer some common questions revolving around mortgages and homeowners wanting to sell.

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What are my options regarding my mortgage when I sell my house?

You will need to talk to your lender as they may have different requirements, but generally, you have two options- you can pay off the mortgage when you get the proceeds from your house and apply for a different mortgage to buy your next house, or you can look at porting your mortgage. Porting your mortgage means transferring the offer that you have currently with the same rates to a new property.

Your lender will be able to confirm what terms will need to be met for you to port your mortgage. If you’ve paid your mortgage payments in full and on time each month you’re likely to be approved, whereas if you have been in arrears and had late payments, they may be less inclined. Porting is a perfect option if you have a really good rate on your current mortgage that you don’t want to lose, but if your rate is fairly standard, you’ll likely be able to find similar rates with another lender if your current one isn’t able to port.

Are there terms of my mortgage stopping me selling before it’s paid?

Generally, your mortgage can be paid off early, allowing you to pay the remainder off with the proceeds of your sale. It is important to speak to your lender before you go ahead with this, though; some lenders will have an early repayment fee in place, and if your lender has this you want to be aware of it when making your decisions. If there is a fee in place, take some time to work out just how much you’d be paying back, if you’re happy to pay this extra money to move house. You may also need to check that you’re able to afford this repayment fee- along with the various hidden costs that come with buying and selling a house, it can get very expensive and sometimes homeowners forget to take this into account. If there’s a substantial fee that you have to pay, you might want to see if your lender will allow you to port the mortgage to avoid this, or you may have to consider delaying your move until the early payment fee is more manageable.

What if I’m in negative equity?

If you are in negative equity, this means that your house value is less than the amount that you owe for your mortgage. This can be for several reasons – sometimes it’s down to house prices decreasing, but more often, it’s if you’ve taken out more than one home equity loan, such as a second mortgage. Homeowners in negative equity can still sell their house but will need to make up the amount that is leaving them in negative equity to pay off the mortgage. You can do this with savings, or potentially by taking out a larger mortgage for your new property to then pay off the current one. If you want to do this, you’ll need to talk to your lender and make sure that this is an option before you make concrete plans, as it will depend on your ability to pay back and the results of a credit check.

Should I wait until I’m mortgage-free to sell?

Some homeowners prefer to sell their house once they’ve paid their mortgage off completely, leaving them free to use the proceeds from the sale in any way they choose. This doesn’t mean that you have to do the same – you can sell your house at any point through your mortgage, so long as you pay what you owe when the sale is finalised. If there is an early repayment fee in place with your mortgage lender, you might want to consider delaying your sale, but this is down to your situation. Sometimes sales cannot be delayed, and you might decide that the early repayment fee is worth paying to sell at this point in time.

If you want to use the money that you’ll gain from your sale for something other than buying elsewhere, you could look into getting a secured loan, or tapping into the equity in your house. This will allow you to access the money tied up in your house without having to sell, allowing you to stay in the house. This is a great option for homeowners who are looking for funds to invest or pay off other debt, without having to sell their house.

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Can I apply for another mortgage if I’m still paying my current mortgage?

Homeowners often ask this question when looking to sell their house and buy elsewhere, especially if they’re looking to upsize. You can apply for another mortgage while still paying off your current one. You should make sure that your lender is aware that you’ll be paying off your current mortgage in full when you sell so they can factor this into your affordability checks, so it doesn’t cause issues with your income and outgoings.

Overall, still having a mortgage on your house doesn’t mean that you can’t sell. Make sure that you check your terms and conditions, and be aware of any potential costs that selling before the end of your mortgage term could incur.

If you’re looking for a quick sale, get in touch with We Buy Any House today. We can provide you with a free cash offer on your property, and walk you through our process of how you can sell your house in as little as 3 days.

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