Yes, in most cases you can sell a house with a mortgage and arrears. The key question is not whether a sale is legally possible, but whether the sale price, timescale and lender position give you enough room to clear the mortgage, deal with the arrears and protect your equity.
If you are already behind on payments, the decision becomes more urgent. Mortgage arrears can lead to added fees, court action and eventually repossession. A normal house sale may still work, but only if it can complete before the lender runs out of patience. A rushed sale can also cost you tens of thousands of pounds if you accept the wrong offer.
This guide explains what happens when you sell a mortgaged property in arrears, what your lender needs, the main sale routes, and how to avoid being pushed into a poor deal when you are under pressure.
The short answer: you can sell, but the mortgage must be dealt with on completion
When you own a property with a mortgage, the lender normally has a legal charge registered against the title. That charge gives the lender security over the property. You can put the property on the market, accept an offer and proceed with conveyancing, but the mortgage must usually be repaid when the sale completes.
Your solicitor will request a mortgage redemption statement from your lender. This statement confirms the amount needed to clear the mortgage on a specific completion date. If you are in arrears, the arrears are normally included within that redemption figure, along with any interest, charges and lender fees that apply.
Once the buyer's money arrives on completion, your solicitor pays the lender first so the charge can be removed. Only after the mortgage, secured debts, sale costs and legal costs have been dealt with does any remaining equity come to you.
You do not usually need your lender's permission simply to market the property. The problem comes if the sale price is not enough to repay the mortgage and all secured charges. In that situation, you are in or close to negative equity, and you may need the lender's agreement before a sale can complete.
Why arrears make the sale more complicated
Mortgage arrears mean you have missed one or more contractual payments. That gives the lender the right to take recovery action if the situation is not resolved. The lender should still treat you fairly and consider support options, but you should not ignore letters, calls or court papers.
The FCA guidance on mortgages and financial difficulty explains that lenders should work with customers who are struggling. Depending on your circumstances, support may include a temporary payment arrangement, changing the mortgage term, switching payment type for a period, or other forms of forbearance.
However, if the arrears are serious, or if you have already broken previous arrangements, the lender may continue towards possession. That is why selling a house with mortgage arrears is a race between three things: the lender's timetable, the sale timetable and the amount of equity left after all debts and costs.
A credible sale can sometimes help you negotiate breathing space. Lenders are more likely to listen if you can show clear evidence, such as a realistic valuation, proof the property is being marketed, an offer from a proceedable buyer, a memorandum of sale, or an exchange and completion timeline. Vague promises rarely carry much weight.
What gets paid when the sale completes?
The biggest misunderstanding is that arrears are a separate debt that can be left behind after completion. In most standard sales, they are not treated separately. The arrears form part of the amount needed to redeem the mortgage.
Here is how the money is usually dealt with on completion.
| Payment or deduction | Why it matters | Who usually deals with it |
|---|---|---|
| Outstanding mortgage balance | The lender's legal charge must be cleared before the buyer gets clean title | Your conveyancing solicitor |
| Mortgage arrears | Usually included in the redemption figure and paid from the sale proceeds | Your conveyancing solicitor |
| Lender fees and interest | Arrears fees, legal fees, daily interest and any early repayment charge may increase the final figure | Your lender and solicitor |
| Secured loans or charging orders | These may also need to be repaid or negotiated before completion | Your solicitor and the secured creditor |
| Estate agent or auction fees | These reduce the amount of equity left after sale | You and your solicitor |
| Remaining equity | This is the balance left after all agreed payments and deductions | Paid to you after completion |
If the sale price is high enough, the mortgage and arrears are cleared and you keep the remaining equity. If the sale price is too low, there may be a shortfall. A mortgage shortfall does not simply disappear because the property has been sold.
For a deeper breakdown of completion-day repayment, shortfalls and negative equity, see this guide to selling a house with mortgage arrears and what happens to your debt.
Can you sell if repossession has already started?
You may still be able to sell if repossession action has started, but the timetable becomes much tighter. A court hearing, a possession order or an eviction date does not automatically mean all options have gone. It does mean you need proper advice and a practical plan very quickly.
If there is a hearing coming up, speak to your lender and get independent advice as soon as possible. You can ask the lender whether they will pause action if there is a realistic sale in progress. You may also be able to explain your sale plan to the court, but you should not rely on this without advice from a housing or debt specialist.
If a possession order has already been made, the lender may still be willing to consider a sale before eviction if it is genuinely likely to complete. The closer the eviction date, the harder this becomes. At that stage, delays, slow buyers and weak offers can be extremely dangerous.
If nothing is done and repossession goes ahead, the lender will take control of the sale. The property may be sold quickly, sometimes at a price that is not focused on preserving your future. Lender legal costs, estate agency or auction costs, interest and other charges can also be added to the debt. If the sale does not clear the mortgage, you could still owe a shortfall.
Your main routes if you need to sell with arrears
When you are in arrears, it is tempting to think only about speed. Speed matters, but price matters just as much. A fast sale that leaves you with no equity, no home and possible remaining debt may not solve the real problem.
These are the main routes homeowners usually consider.
| Route | Potential benefit | Main risk |
|---|---|---|
| Do nothing | No immediate decision to make | Repossession, escalating costs, loss of control over the sale and possible shortfall |
| Traditional open market sale | Often the best chance of full market value | Can take months and may fall through if the buyer's mortgage, survey or chain fails |
| Auction sale | Fixed auction timetable and public bidding | Sale price can be uncertain, fees apply and the property may not meet reserve |
| Cash buyer or quick sale offer | Can appear fast and simple | Offers are often around 70% to 75% of market value, and some firms reduce the price late in the process |
| Structured arrears and finance solution | Can stop immediate pressure, protect equity and create time for a full-value outcome | You must check the firm carefully and understand the structure before signing anything |
The quick house sale sector can be particularly risky for homeowners in arrears. Many cash buyers aim to buy as cheaply as possible to maximise their profit. In some cases, the offer is built around the mortgage redemption figure rather than the true value of the home, meaning the homeowner sells quickly but walks away with little or nothing.
A common horror story is the late price drop. A verbal offer is made at the start, the seller commits to the process, then the price is reduced at the 11th hour when the seller is too far along, too stressed or too close to repossession to walk away. If you are considering that route, read this guide on checking cash house buyer reviews before selling in repossession and look beyond surface-level promises.
How to protect yourself before agreeing to any sale
If you need to sell a house with a mortgage and arrears, slow down just enough to gather the facts. Even when time is short, a few checks can stop you from accepting a deal that damages your position.
Start with the exact mortgage redemption figure. Do not rely on an old mortgage balance from a statement, as arrears fees, daily interest and legal costs may have changed the amount. Ask the lender how long the figure is valid for and whether any early repayment charge applies.
Next, list every secured debt connected to the property. That can include second charges, secured loans, charging orders and sometimes restrictions on the title. If there is more than one secured creditor, the sale proceeds may need to be divided in a strict order.
Before signing anything, check the buyer or firm in writing. Verbal promises are not enough when your home is at stake.
- Get every offer, deduction, fee and condition in writing.
- Ask who is actually buying, funding or controlling the transaction.
- Check whether the offer depends on a later survey or valuation.
- Ask which solicitor will act and whether you can use your own independent solicitor.
- Refuse pressure to sign before you understand the numbers.
- Keep copies of emails, letters, lender statements and court documents.
You should also verify any company that offers to help. Check membership of The Property Ombudsman by member ID, search the ICO register if personal data is being handled, and review the company's trading history and named directors at Companies House. A legitimate firm should welcome these checks.
Faster Property Solutions passes those checks. FPS has operated since 1998, is a member of The Property Ombudsman, is ICO registered under ZA578580, and has been featured on Sky TV. Its wider work also includes the FPS Foundation, a charitable arm running a chess-in-schools programme that has reached more than 1,000 children in South West London primary schools.
What Faster Property Solutions does differently
Faster Property Solutions is not a cash buyer, a property buying company or an estate agent. That matters because the incentive is different. A cash buyer usually profits by buying below market value. FPS builds a bespoke solution around the homeowner's situation, the arrears position, the lender timetable and the equity in the property.
In the last three years, FPS has helped over 100 homeowners and purchased only one property. The usual goal is not to buy the home at a discount. It is to stop the immediate damage, restructure the finances and, where a sale is the right answer, arrange a full market value sale through a joint venture.
Depending on the case, FPS can pay mortgage arrears within 24 hours, provide cash advances while the solution is worked out, cover legal and solicitor costs, and charge the homeowner no upfront costs and no fees. The first conversation is with a dedicated team member who will listen, understand the urgency and connect you with the right specialist.
The honest outcome is not a promise that everyone can stay in their current home debt free. In many cases, getting your life back debt free means selling at full market value, releasing the equity and moving to a smaller home that can be bought outright, with no mortgage ever again. For some families, that is the difference between a forced repossession and a planned fresh start.
If you are still weighing your options, it may help to think of the decision in three broad routes. You can do nothing and risk repossession. You can accept a fast discounted offer and risk losing most of your equity. Or you can work with a firm that deals with the arrears and creates enough time and structure to aim for a full-value outcome.
When selling may not be the right first step
Selling is not always the best answer. If the arrears are small, the problem is temporary, or your income is likely to recover, you may be able to agree a plan directly with the lender. You should also check whether you are entitled to benefits, insurance payments, help from family, or breathing space through a regulated debt solution.
Free, independent help is available. Shelter offers housing advice and can be contacted on 0808 800 4444. StepChange provides free debt advice. Citizens Advice can help you understand mortgage problems and court paperwork. National Debtline also provides free debt guidance.
FPS content should never make you feel that a private solution is your only option. If a free route solves the problem, that may be the right route. For a broader overview of lender support, debt help and practical next steps, see this guide to mortgage arrears help in the UK.
Frequently Asked Questions
Can I sell my house if I am behind on the mortgage? Yes, you can usually sell your house if you are behind on the mortgage, provided the sale proceeds can repay the mortgage and any secured charges. The arrears are normally included in the amount paid to the lender on completion.
Do I need my lender's permission to sell? You usually do not need permission just to market the property. You do need the mortgage to be redeemed on completion. If the sale price will not cover the mortgage and secured debts, you will need to speak to the lender because a normal sale may not be able to complete without agreement.
Can I sell after a repossession hearing has been listed? It may still be possible, but time is critical. Tell your lender immediately, gather proof of a realistic sale and get advice from a housing or debt specialist. A court may consider a credible plan, but you should not assume proceedings will automatically stop.
What if a cash buyer offers enough to clear the mortgage but nothing more? Be very careful. An offer based only on the redemption figure may solve the lender's problem while leaving you with no equity to move forward. Always compare the offer with the true market value and get the figures in writing before agreeing to anything.
Will selling clear all my debts? Selling will usually clear the mortgage if the proceeds are high enough. It may not clear unsecured debts, and it may not clear all secured debts if there is negative equity. You need a full picture of the mortgage, arrears, secured loans, charges and sale costs before deciding.
Is Faster Property Solutions a cash buyer? No. Faster Property Solutions is not a cash buyer or estate agent. It creates bespoke solutions for homeowners in difficulty, including paying arrears, restructuring finances and, where appropriate, arranging a full market value sale through a joint venture.
If you need to act quickly
If you are trying to sell a house with a mortgage and arrears, the worst thing you can do is wait until the lender, court or eviction timetable takes the decision out of your hands.
You can speak to Faster Property Solutions on 0800 324 7949, 24 hours a day, 7 days a week. There are no upfront costs and no homeowner fees. A dedicated team member will listen to your situation, look at the arrears and timescale, and help you understand whether there is a route to stop the immediate pressure and protect your future.