Yes, you can sell your house while you still have an outstanding mortgage. This is completely normal in the Netherlands and happens in the vast majority of home sales. At the time of the notarial transfer, the mortgage is automatically paid off from the sale proceeds. In this article, we answer the most frequently asked questions about selling a home with a mortgage.
What happens to your mortgage when you sell your house?
When you sell your home, the mortgage is paid off at the moment of the notarial transfer. The notary settles the outstanding mortgage debt directly from the sale proceeds. Whatever remains after that — the difference between the sale price and the remaining debt — is yours to keep. Your mortgage lender officially closes the loan once it has been repaid.
In practice, the process works as follows: on the day of the transfer, the notary transfers the purchase price to the mortgage lender to repay the debt. Any equity you have built up is then paid out to you. You do not need to take any separate steps yourself; the notary handles the settlement.
It is wise to contact your mortgage lender in good time to request an official repayment statement. This way, you know exactly how much is outstanding on the transfer date, including any accrued interest. Some lenders also charge a fee if you repay the mortgage earlier than contractually agreed.
What is home equity and what can you do with it?
Home equity is the amount left over after the sale proceeds of your property have covered the outstanding mortgage debt and any associated selling costs. If your home sells for more than the remaining mortgage balance, you have equity. This amount is freely available to you once the notary has completed the transfer.
There are several things you can do with your home equity:
- Put it toward a new home as a down payment, which means you need a smaller mortgage and pay lower monthly costs.
- Pay off other debts, such as a personal loan or consumer credit.
- Save or invest it for a future goal.
- Spend it freely on renovations, travel, or other expenses.
Be aware of the reinvestment rule (bijleenregeling). If you do not reinvest the equity into a new primary residence, you lose the right to mortgage interest deduction on that portion of a new mortgage. This has direct tax implications. Seek advice from a mortgage advisor before deciding what to do with your equity.
What if the sale price is lower than your mortgage balance?
If the sale price is lower than the outstanding mortgage debt, you are left with a residual debt. This means you still owe money to the mortgage lender after the sale. This is less common than it used to be, but it is important to be aware of this risk in advance.
In this situation, there are a few options:
- Cover the residual debt yourself using personal savings at the time of transfer.
- Arrange a payment plan with the mortgage lender for the remaining debt.
- Roll the residual debt into a new mortgage, if the lender permits it and your income allows for it.
If you are selling your home not voluntarily but due to financial difficulties, it is advisable to contact your lender early. Many mortgage lenders will work with you toward a solution in such cases to avoid a forced foreclosure sale, which typically yields an even lower return.
Can you transfer your mortgage to a new home?
Yes, in many cases you can transfer your existing mortgage to a new home. This is known as mortgage portability. You retain the fixed-rate period and interest rate of your current loan, which can be advantageous if current market rates are higher than your contracted rate.
Whether you can do this depends on several factors:
- Your mortgage lender must offer portability as part of your current product’s terms and conditions.
- The new property must meet the lender’s acceptance criteria.
- Your income and financial situation will be reassessed.
- If the new home is more expensive, you will need to take out a supplementary loan for the additional amount, sometimes at a higher interest rate.
Check your mortgage terms or ask your lender directly whether portability is possible. Not all mortgage products offer this option, and the rules can vary considerably between lenders.
What costs are involved in selling a home with a mortgage?
Selling a home with an outstanding mortgage involves various costs. The largest item is often the early repayment penalty charged by your mortgage lender if you repay the mortgage before the contractually agreed date. There are also other selling costs you need to factor into your calculations.
Below is an overview of the most common cost items:
- Early repayment penalty: This amount varies by lender and depends on the remaining fixed-rate period and the difference between your rate and the current market rate. Always request an official quote.
- Notary fees: You pay notary fees for the deed of transfer and the removal of the mortgage from the Land Registry. This typically ranges from a few hundred to well over a thousand euros.
- Estate agent commission: If you use a selling agent, you pay a commission, usually a percentage of the sale price.
- Valuation or appraisal costs: Depending on the situation, a formal valuation report may be required.
- Energy label costs: A valid energy label is mandatory when selling a property.
Add up all of these costs before calculating the net proceeds of your sale, so you are not caught off guard.
When is it a good idea to use an estate agent?
Hiring a selling agent makes sense whenever you want the sale of your home to go smoothly, quickly, and at the best possible price. An agent knows the local market, understands how to present a property effectively, and negotiates on your behalf with prospective buyers. This expertise carries particular weight in a complex market or when selling a unique property.
An estate agent adds concrete value in the following situations:
- You are unsure of your property’s value and want a well-founded valuation.
- You have limited time or experience with the sales process.
- Your property requires a carefully considered marketing approach to reach the right buyers.
- You want professional negotiation support to achieve the best price.
- You are relocating abroad and want the sales process managed remotely.
Without an agent, you can save on commission, but you take on all the tasks yourself: photography, listings, viewings, negotiations, and the legal handling. That requires time, knowledge, and energy. For most sellers, the benefits of professional guidance outweigh the costs.
How we help you sell your home
At Urban Homies, we guide you through the entire sales process, from the initial valuation to signing at the notary. We start with a thorough analysis of market conditions and a realistic valuation of your property. Based on that, we develop a marketing strategy tailored to your situation and target audience.
What we take care of for you:
- Professional photography and a compelling, custom property presentation.
- Active marketing through the right channels to reach the right buyers.
- Guidance through viewings and negotiations to achieve the best price.
- Legal and notarial handling in collaboration with our established partners.
- Aftercare following the transfer, so you can count on us even after the sale.
Want to know what your home is worth or how we approach your sale? Get in touch for a no-obligation conversation, or visit our selling agent services page to learn more about our approach.
