What Happens to Your Mortgage When You Sell Your Home?

Selling your home is a major financial decision, and understanding what happens to your mortgage when you sell is crucial. Whether you’re upsizing, downsizing, or relocating, knowing your mortgage options can help you navigate the process smoothly.

Paying Off Your Existing Mortgage When You Sell Your Home

When you sell your home, the proceeds from the sale typically go toward paying off your outstanding mortgage balance. Your lender will provide a redemption statement detailing:

• The remaining loan balance

• Any early repayment charges (if applicable)

• Additional fees, such as administrative costs

If you’re unsure how much you still owe, check with your lender or use our Mortgage Repayment Calculator for an estimate.

Can You Transfer Your Mortgage? (Porting Your Mortgage)

Some lenders allow porting your mortgage, which means transferring your existing mortgage to your new home. Porting can be beneficial if:

• Your current mortgage has a favorable interest rate.

• You want to avoid early repayment fees.

• Your lender approves the new property and your financial circumstances remain stable.

To determine if porting is an option, speak with your lender or consult with our experts at Possible Mortgages.

What If Your Home Sale Doesn’t Cover the Mortgage Balance?

In cases where your home’s sale price is lower than the mortgage balance (negative equity), you may need to:

• Pay the shortfall using personal funds.

• Negotiate with your lender to find a feasible repayment solution.

• Explore refinancing options to manage remaining debt more effectively.

If you need help assessing affordability for a new mortgage, use our Mortgage Affordability Calculator.

Should You Get a New Mortgage for Your Next Home?

If you’re moving to a new property, you’ll likely need a new mortgage. To secure the best deal:

• Compare rates using our Compare Fixed Rate Mortgage Calculator.

• Obtain a Mortgage in Principle to show sellers you are a serious buyer.

• Work with a mortgage broker to find tailored solutions for your new home purchase.

Final Thoughts

Understanding what happens to your mortgage when you sell is key to a smooth property transaction. Whether you’re paying off your loan, porting your mortgage, or securing a new one, careful planning ensures a stress-free move. Need expert guidance? Contact us today for mortgage solutions tailored to your needs.

You may have to pay an early repayment charge to your existing lender if you remortgage.