When Do You Stop Paying the Mortgage When Selling?
When you sell a home you still have a mortgage on, it is easy to assume the payments stop the moment you accept an offer. They do not. You keep paying right up until the sale completes and your lender is repaid. This guide explains exactly when your mortgage ends, how the redemption process works, and the timing traps that can catch sellers out.
At a glance
- You stop paying
- When the sale completes and funds clear
- Until then
- Keep every monthly payment going
- The final bill
- A redemption (early settlement) figure
- Interest
- Accrues daily until completion
Key takeaways
- Your mortgage obligation ends at completion, the moment the buyer's funds clear and your lender is repaid.
- Keep paying until then. Miss a payment before completion and it can still harm your credit and the sale.
- Your solicitor gets a redemption statement from your lender, the exact figure needed to clear the mortgage.
- Interest accrues daily, so a delayed completion slightly increases the amount owed.
When exactly do you stop paying?
You stop paying your mortgage the moment the sale completes and the buyer's money clears your outstanding balance. Not when you accept an offer, not at exchange of contracts, but at completion, the day ownership legally transfers and the money moves.
Up to that point you must keep every monthly payment going as normal. A missed payment in the run-up to completion can damage your credit file and, in the worst case, put the sale at risk, so keep the direct debit running until the mortgage is formally redeemed.
How mortgage redemption works
Clearing the mortgage on sale is called redemption, and your solicitor handles it:
- Before completion, your solicitor asks your lender for a redemption statement (sometimes called an early settlement figure). This is the exact amount needed to clear the mortgage on a given date.
- Because interest accrues daily, the figure is tied to a specific completion date. If completion slips by a few days, the amount owed rises slightly.
- On completion day, the buyer's funds arrive with your solicitor, who pays off your lender first, then sends you whatever is left after fees.
So the mortgage is not something you settle separately; it is cleared automatically out of the sale proceeds as part of completion.
The timing traps to watch
A couple of quirks catch sellers out:
- Bank cut-off times. Funds have to clear by the bank's daily cut-off (often early afternoon). If they do not, completion can roll to the next working day.
- Friday completions. If a Friday completion misses the cut-off, it can slip to the following Monday, meaning a few more days of interest, so aim to complete earlier in the week where you can.
- Early repayment charges. If you are still within a fixed deal, redeeming the mortgage may trigger an early repayment charge, unless you are porting the mortgage to your new home.
What if you are buying at the same time?
Most people sell and buy on the same day. In that case your solicitor uses the sale proceeds to redeem the old mortgage and put down the funds on the new purchase, often within hours. If your new mortgage is with the same lender, you may be able to port your existing deal and avoid an early repayment charge.
Frequently asked questions
Do I pay my mortgage the month I complete? You keep paying as normal until completion. The lender is then repaid in full from the sale, and any overpaid interest is usually reflected in the redemption figure.
What is a redemption figure? The exact amount needed to clear your mortgage on a specific date, including interest to that day. Your solicitor requests it from your lender before completion.
Will I pay a penalty for repaying early? Possibly, if you are within a fixed deal with an early repayment charge. Porting the mortgage to a new home can avoid it.
Selling and moving? See what happens if you have a mortgage but want to move, and if timing is tight, read about a mortgage offer expiring before completion.
