How can you sell a property and keep your mortgage?
Are you thinking about selling your primary residence to buy another while you still have an active mortgage? With interest rates rising, many homeowners prefer to avoid having to pay off their loan in full before taking out a new one.
The idea of keeping an existing loan at a favorable rate is appealing, especially since it would avoid early repayment penalties. But is it actually possible in practice?
In this article, we review the principle of mortgage portability or transferability, its benefits, the strict conditions for eligibility, and the steps to follow to implement it. Discover how to sell a property without immediately paying off your loan and decide if this strategy is right for your plans.
Do you have to pay off your mortgage when selling your home?
General rule: selling a property triggers the repayment of the current loan
When selling a property before the end of the loan term, the general rule is that the mortgage must be paid off at the time of sale.
Legally, there is nothing to prevent you from selling with an outstanding loan, and there is no minimum holding period imposed by law. However, in most cases, the bank requires repayment of the loan upon sale.
The loan is backed by the financed property: the bank has generally secured a guarantee (a mortgage or surety) on the home. As such, it can demand repayment as soon as the property is sold.
The proceeds from the sale are therefore used to settle the remaining principal balance and, if applicable, to pay early repayment penalties (generally 6 months of interest, capped at 3% of the remaining principal).
The exception: mortgage portability
The portability (or transferability) of a mortgage is a mechanism that allows you to transfer an existing loan to a new property, instead of paying it off at the time of sale.
In other words, the borrower keeps their original loan (same interest rate, same remaining term, etc.) to finance the purchase of another home, without interrupting repayments.
"A huge thank you to the Maison Kyka team, who supported me with professionalism and kindness throughout my real estate project. From the initial stages of identifying properties based on my criteria, needs, and desires—including remote viewings from the other side of the world—to drafting the offer, 3D design, construction monitoring, interior design, and advice, everything was seamless, clear, and reassuring."
Arnaud Lludriguez
Why keep your loan after selling a property?
Although loan portability is rare, it allows you to:
- take advantage of an attractive interest rate;
- avoid paying additional costs (early repayment penalties, application fees, etc.);
- simplify and speed up the financing of a new property.
Benefit from an interest rate lower than current market rates
In recent years, mortgage interest rates have risen sharply. Between 2022 and 2023, average 20-year rates climbed from around 1% to over 4%. After stabilizing in 2025, mortgage rates are now hovering around 3% at the start of 2026, offering greater clarity for prospective buyers.
In this context, keeping an older, low-rate loan is a valuable asset. You continue to make repayments at your original rate, which is often much lower, potentially saving you thousands of euros in interest over the remaining term of the loan. By holding onto your credit at an advantageous rate, you keep your monthly payments lower than if you were to borrow again at current market rates.
Avoid the penalties and costs of a new mortgage
Another benefit of loan transferability is thecost savings it provides.
For one thing, you do not have to pay early repayment penalties to the bank, since you are not paying off the loan (or only doing so partially). These penalties, capped at 3% of the outstanding capital, can represent a significant amount.
Furthermore, by keeping your existing loan, you avoid certain costs associated with a new loan : new loan application fees, guarantee fees (mortgage or surety) for the new property, potential brokerage fees, etc.
- For an owner-occupier, this makes it possible to better capitalize on the profit from the sale of their primary residence.
- For buy-to-let investors, keeping a low-interest loan for a new rental property improves the overall return on investment.
Simplifying financing for your new property
Keeping your existing loan can also make it easier to carry out your new real estate project because if the bank agrees to the transfer, you don't have to start from scratch with a standard loan application process (putting together a new file, waiting for a loan offer, etc.).
Retaining your loan allows you to benefit from an operational financing solution for your new house or apartment. This can be invaluable in a tight market where timing is everything, as this advantage allows you to shorten the time between signing the preliminary contract and the final deed of sale.
As such, loan portability can be a project accelerator because it avoids the overlap period where you are repaying one loan while waiting for new financing.
Under what conditions can you keep your mortgage after selling your home?
The transferability of a mortgage is subject to certain conditions set by the contract and/or the bank:
- Transfer clause in the contract: your initial loan agreement must include a clause for the transferability or portability of the credit to another property. Without this written clause, there is no basis for the bank to allow you to keep the loan.
- Bank approval and review of your new project: even if the clause exists, the bank must still give its approval. When the time comes, it will review your current financial situation and the characteristics of the new property you are purchasing to ensure that you can make the repayments and that the financed property provides sufficient collateral. In some cases, the bank may refuse the transfer despite the existence of a portability clause.
- Price of the new property: In most cases, banks require the price of the new property to be greater than or at least equal to the remaining principal on your loan. If you purchase a property for less than what you still owe, the bank may require a partial repayment of the loan.
- Nature of the new property: the bank may require the new property to be of the same type as the previous one. For example, if your initial loan financed the purchase of a primary residence, you must acquire a new primary residence to be eligible to transfer the loan. These conditions ensure that the transferred loan finances a project that is comparable in terms of risk and usage.
- Limited timeframe between sale and purchase: a loan transfer is only possible if the sale and the new purchase occur within a relatively short period. Each bank has its own rules, but generally, the purchase of the new home must take place within 3 to 6 months of selling the previous one. Some banks may grant a slightly longer period (up to one year), but this is rare. This constraint is intended to limit the period during which the loan is not backed by any real estate, which represents a risk for the bank.
- No mortgage to settle on the previous property: if your loan was secured by a mortgage on the property being sold, the bank will need to release this security upon the sale. In this case, a loan transfer is impossible unless another form of collateral is provided. In practice, the existence of a mortgage makes portability difficult, unless the bank agrees to coordinate the release of the old mortgage and the registration of a new one on the new property almost simultaneously. This arrangement is complex, which is why, most of the time, the existence of a mortgage means the loan must be closed upon the sale.
- For regulated or subsidized loans (PTZ, PAS, etc.): the new property must meet the current conditions of the loan, especially if the transfer occurs within six years of obtaining the initial loan.
- Other criteria to meet: having no payment incidents on the current loan, remaining a client of the bank, obtaining the guarantor's approval if the loan was backed by a third-party organization... each bank may add specific conditions.
Since the 1980s, few loans have included transferability, and with the rise in interest rates in recent years, financial institutions have even less incentive to allow their clients to keep their low-rate loans.
In summary, a loan transfer is an attractive option but is reserved for very specific situations. It requires a contractual clause, a solid application, and a purchase project that meets the bank's requirements. It is therefore not automatic and French banks remain quite reluctant to grant this facility.
Tips for keeping your loan after selling a property
Check for a portability clause in your mortgage agreement
Not all borrowers have a loan agreement that includes a portability clause. Without this explicit provision, no bank is required to accept a loan transfer after the sale of your home.
You must therefore identify this clause in your contract documents and understand its conditions: the timeframe for transferring the loan, the minimum value of the new property to be financed, the type of property (primary residence, rental, etc.), and any potential exclusions. If this clause is absent, you will need to consider other solutions such as loan refinancing, a bridge loan, or a standard early repayment.
Presenting a solid project to the bank
Even with a portability clause, banks require a review of your current financial situation before approving the transaction. This involves an analysis of your income, debt-to-income ratio, and professional stability, as well as the characteristics of the property you intend to purchase. Your real estate project must therefore be clear, quantified, and robust. Presenting a sales agreement or a promise to sell significantly strengthens the credibility of your request.
Anticipating the coordination between sale and acquisition
Most contracts impose a maximum period of a few months to transfer the mortgage after the sale. Exceeding this deadline can void the transfer and force you to make a full early repayment. Proper timing between the sale of your current property and the purchase of your new home is therefore crucial.
Adapting loan guarantees to the new property
When a mortgage is secured by a lien, selling the property requires lifting that guarantee. Transferring the loan then involves setting up a new mortgage or guarantee on the home you are buying. This entails costs to anticipate (release of lien, notary fees, mortgage registration) and requires close collaboration between your notary and your bank.
Adjusting borrower insurance to the new project
Borrower insurance, often overlooked in this type of operation, must also be adjusted. If you keep the same loan for a different property, the insurance must follow suit and adapt to your new situation: potentially modified amounts, the new property being financed, and the adjusted remaining term.
It may be useful to review your insurance contract at this time, or even to request an insurance delegation if it offers better terms.
Get professional support
A broker can quickly tell you if your bank allows loan portability and can even negotiate the terms on your behalf. They can also suggest optimized backup plans (refinancing, combined bridge loans, etc.) in the event of a refusal.
Similarly, informing your notary of your loan transfer project is helpful: they are well-positioned to organize the release of the lien on the old property and the establishment of guarantees on the new one. Good communication between you, the bank, the notary, and potentially the broker is the key to a successful operation.
Through its personalized approach, Maison Kyka helps you orchestrate every step of your project, from sale to purchase, including securing your mortgage. We connect you with the right contacts and provide you with the tools to present a solid, coherent, and convincing case to banks.
.webp)
.svg){kind=logo}