How is a buy-to-let mortgage repaid when I sell?
When you sell a mortgaged property, the loan is repaid from the sale proceeds on completion, using a redemption statement from the lender. If you are still in a fixed or discounted rate period, an early repayment charge, often 1% to 5% of the balance, may also be due.
Read more in our guide: Fees and costs of selling
Key facts at a glance
| Item | Detail |
|---|---|
| Redemption statement | The lender's figure to clear the loan on a given date, including daily interest and fees |
| Who requests it | Your solicitor, with your authority |
| Early repayment charge (ERC) | Commonly 1% to 5% of the balance during a fixed or discounted period, often reducing each year |
| Other fees | Exit or deeds release fees, and sometimes product fees added to the loan |
| Portfolio and cross-collateral loans | May need lender consent or a larger repayment to release individual properties |
| Negative equity | Any shortfall must be paid or agreed with the lender before completion |
How Redemption Works on Completion
Before exchange, your solicitor obtains a redemption statement from each lender. On completion, the buyer's money arrives, your solicitor sends the lender the redemption amount the same day, and the lender's charge is removed from the title at HM Land Registry. What is left, after fees and any other charges, is paid to you. If the sale price will not cover the loan, the shortfall must be dealt with before exchange.
Early Repayment Charges
Most buy-to-let products have an ERC during the fixed or discounted period, typically on a sliding scale such as 5%, 4%, 3%, 2%, 1% over five years. On a £150,000 balance in year two of a five-year fix at 4%, the ERC would be £6,000. Some lenders allow a part repayment each year without charge, and a few allow a mortgage to be ported to another property, but porting is less common in buy-to-let.
ERCs can be a reason to time a sale, or to structure a phased sale around the end of each fixed rate. Weigh the charge against the cost of waiting, including higher interest and tax under Section 24.
Mortgages in a Portfolio Sale
- List every loan, lender, balance, rate, end date and ERC in one schedule before you market the portfolio.
- Portfolio facilities secured on several properties may only release a property if the loan-to-value of the rest stays within limits.
- Second charges, bridging loans and personal guarantees all need clearing or releasing.
- Company share sales need the lender's consent or refinancing, because the borrower does not change.
- Redemption statements are valid for a set date, so update them if completion moves.
- The CGT is payable on the gain, not on the cash you receive, so on a highly geared portfolio check there will be enough left to pay the tax.
Official Sources and Further Reading
General information for landlords in England, checked against official sources in October 2026. It is not tax, legal or financial advice: speak to a qualified accountant or solicitor about your own circumstances.
Frequently Asked Questions
When you sell a mortgaged property, the loan is repaid from the sale proceeds on completion, using a redemption statement from the lender. If you are still in a fixed or discounted rate period, an early repayment charge, often 1% to 5% of the balance, may also be due.
Usually yes, if you sell during the fixed or discounted rate period. The charge is set out in your mortgage offer and is often 1% to 5% of the balance.
Yes, but the shortfall between the sale price and the mortgage must be paid or agreed with the lender before the sale can complete.
Often a few working days, but it can take longer for several lenders or complex portfolio loans, so ask your solicitor to request them early.
Thinking About Selling Your Portfolio?
Ask for a no-obligation portfolio appraisal, or call us to talk through your options in confidence.