Can you sell a flat with a mortgage? Steps to do it without problems

Many homeowners in Madrid wonder whether they can sell their flat while they are still paying the mortgage. The short answer is yes: selling a property with an outstanding mortgage is very common and perfectly legal. The important thing is to plan it well so that the money from the sale covers the debt, the costs and leaves you with the margin you expect. In this guide we explain, step by step, how to do it without surprises.

First, find out exactly how much you owe

Before putting the flat on the market, ask your bank for a **certificate of outstanding debt**. This document shows the capital still to be repaid on a specific date. With it, you will know the minimum amount you need to obtain to cancel the loan. Also check your mortgage deed: this will show any early repayment fees, which vary depending on the type of loan and the date it was signed.

Calculate your property's true value

The next step is to know how much your flat is worth today. If the market price is clearly higher than the debt, the process will be straightforward. If the difference is small, it is worth being very precise about the price and the costs. You can start with our free online valuation tool and then request an in-person valuation to adjust the figure to the real characteristics of your property, the floor, the condition and the street.

The three ways to sell with a mortgage

**1. Pay off the mortgage at completion.** This is the most common option. On the day of the sale deed, the buyer pays and part of the amount is used directly to settle the debt with the bank. Normally, a representative of the bank attends, or it is handled by bank cheque. The land registry cancellation is then processed.

**2. Transfer by the buyer.** The buyer takes over your mortgage on the same terms, if the bank approves it. Today this is less common, because buyers usually look for their own financing with better conditions.

**3. Pay it off before selling.** If you have savings, you can clear the loan before selling. This simplifies the signing, although it requires prior liquidity.

Costs you need to anticipate

When selling a flat with a mortgage, you should factor in the possible early repayment fee, the costs of land registry cancellation (notary, registry and agency, if you decide to cancel the charge at the Land Registry), the municipal capital gains tax and tax on the capital gain in your income tax return. Every case is different, so it is worth consulting a tax adviser before setting the price.

Organise the timings well

Coordination is key: the bank needs a few days to issue the updated debt certificate and prepare the cancellation. Informing the buyer and their bank from the outset avoids delays. At the deposit stage, it is advisable to make it clear in the contract that the property will be handed over free of charges.

What if the debt is greater than the sale price?

If the value of the flat does not cover the mortgage, you will have to contribute the difference or negotiate with the bank. Before making a decision, consider alternatives such as temporarily renting out the property. In our guide to renting out your flat in Madrid we explain how to do it with peace of mind.

How UBICASA helps you

At UBICASA, we support the owner throughout the entire process: valuation, paperwork, coordination with the bank and the notary, and negotiation with the buyer. If you are thinking of selling your flat in Madrid, we help you calculate how much you will really have left after paying off the mortgage.

If you want to review your case, contact us. We are open Monday to Friday from 10:00 to 15:00 and from 16:00 to 19:00.