Paying off your mortgage is a major moment. Whether you’re moving, remortgaging, or reaching the end of your loan, this process is called mortgage redemption. In this guide, we’ll explain what it means, how it works, and what costs you might face. We’ll also help you decide when it makes financial sense to redeem early and when it might not.
What is mortgage redemption?
Mortgage redemption is when you pay off your mortgage in full, either by choice or because the mortgage term has ended. It can happen for a few reasons:
- You’re moving and can’t transfer your current mortgage
- You’re switching to a new lender
- You’ve saved enough to pay off the loan
- Your mortgage term has ended
In all these cases, the mortgage account is closed, and your home is no longer tied to your lender.
Redemption doesn’t always happen at the end of a mortgage. Many people redeem early to remortgage, move house, or lower their monthly payments by clearing the balance.
What happens in the mortgage redemption process?
If you’re ready to repay your mortgage, the first step is to contact your lender and ask for a redemption figure. This is the total amount you need to pay to close your account. In most cases, your solicitor will handle this, especially if you’re moving or switching lenders.
The lender works out the final amount based on your current loan, interest up to the redemption date, and any charges. If you’re remortgaging, your new lender usually sends the money straight to your current lender on completion day.
Once it’s paid off, you’ll get confirmation and, in many cases, a closing statement showing the payments made and when your account was closed.
What is a mortgage redemption statement?
A mortgage redemption statement is a document from your lender showing what you owe to fully clear your mortgage. It includes:
- Your remaining loan balance
- Interest added up to the final payment date
- Any early repayment charge (ERC), if you have one
- Admin or closing fees
Redemption statements are usually valid for 4 weeks. After that, interest might change the total, so you’ll need an updated one.
Your solicitor will use this to make sure the full amount is paid. If you’re settling the mortgage yourself, you’ll use the statement details to send payment.
How do I get a mortgage redemption statement?
You can ask for a mortgage redemption statement by:
- Calling your lender’s customer service
- Logging into your online account (if available)
- Writing to your lender
- Asking your solicitor to request it for you
Some lenders have online forms or secure portals to request statements. Others send them by email or post. It usually takes about 3 to 7 working days, but that depends on the lender.
Check with your lender if there’s a charge for this—most don’t, but some might.
How to calculate your mortgage redemption figure?
To work out your redemption figure, you’ll need:
- Your current mortgage balance
- The number of days’ interest up to your planned payment date
- Any fees (like admin charges or ERCs)
Most lenders work out interest daily, so they need your payment date to give an accurate figure. Interest rates, fees, and the type of mortgage all affect this number.
Some lenders offer online calculators for an estimate, but the final figure should come from your lender. If you’re using a solicitor, they’ll request and explain it for you.
What happens with the title deeds once my mortgage is paid off?
If you’ve paid off your mortgage in full your lender will remove their legal claim on your home at HM Land Registry. This shows they no longer have a right to your property.
If your home is registered electronically (as most are), this update is done online. If your property has paper title deeds, they may be returned to you or your solicitor.
Either way, you fully own your property with no mortgage attached.
What are the fees associated with mortgage redemption?
Mortgage redemption may involve a few extra costs:
- Mortgage redemption fee – Also called an admin, discharge, or exit fee. It covers the cost of closing your mortgage. Usually between £50 and £300.
- Early repayment charge (ERC) – If you pay off your mortgage during a fixed or special rate period, you might pay a penalty. This can be 1% to 5% of your loan, depending on how early you pay it off.
- Solicitor fees – If you’re moving or remortgaging, your solicitor may charge for helping with the process and contacting your lender.
All of these are listed in your redemption statement. If you’re thinking about a new deal, it’s important to compare these fees with any savings from a lower interest rate.
Should I redeem my mortgage early?
Paying off your mortgage early can be a great goal, but it’s important to think it through.
Good reasons to redeem early:
- You’ll stop making monthly mortgage payments
- You’ll own your home outright
- You could save a lot on interest over time
Things to think about:
- You may have to pay ERCs or other fees
- You’ll use up a lot of savings that could be used elsewhere
- You might lose helpful mortgage features like payment holidays
If you’re not sure what’s right, talk to a mortgage advisor. They can help you decide what fits your goals best.
Conclusion
Mortgage redemption is the process of paying off your mortgage in full—whether you’re moving, remortgaging, or simply finishing your loan. It’s useful to understand how to get your redemption figure, request a statement, and prepare for any fees.
If you’re ready to be mortgage-free or make your next move, understanding mortgage redemption helps you plan with clarity.
If you’re a Pepper Money customer, you can find more details on our Existing Customer page about how to request a mortgage redemption statement.
Thinking about your next steps? Talk to one of our trusted broker partners to see what’s possible for you.