How to Sell a House With a Mortgage

How to sell a house with a mortgage is a common question among Alberta homeowners, and the good news is that it’s completely standard practice. Most home sellers still have an outstanding mortgage when they list their property. Whether you’re selling in Airdrie, Cochrane, or anywhere in Alberta, the process is straightforward when you understand how mortgage payoff works at closing.

Understanding Your Mortgage Balance

Before listing your home, contact your lender to get your current mortgage payoff amount. This includes your remaining principal balance plus any accrued interest up to your anticipated closing date. Ask about prepayment penalties, as some mortgages charge fees for paying off your loan early, especially if you’re in a fixed-rate term. In Alberta, these penalties can range from three months’ interest to the interest rate differential (IRD), which can be substantial.

Calculate Your Home Equity

Your home equity is the difference between your property’s current market value and your mortgage balance.

For example, if your home is worth $550,000 and you owe $350,000, you have $200,000 in equity. At Property

Sisters, we provide comparative market analyses to help you understand your home’s current value in the Airdrie and Cochrane markets, so you know exactly where you stand financially.

The Closing Process

When you sell your house with a mortgage, the mortgage gets paid off automatically at closing through your lawyer or notary. Here’s how it works: the buyer’s funds are transferred to your lawyer, who then pays off your mortgage lender directly from the sale proceeds. You receive the remaining equity after the mortgage is paid and closing costs are deducted. This all happens on the same day, so you never need to worry about carrying two mortgages.

Timing Your Next Purchase

Many sellers worry about how to sell a house with a mortgage while simultaneously buying their next home.

There are several strategies we help clients navigate:

Bridge financing allows you to access equity from your current home before it closes, helping fund your next down payment. Alberta lenders typically offer bridge loans for 90-120 days at competitive rates.

Conditional offers let you make your purchase offer conditional on selling your current home, protecting you from owning two properties simultaneously.

Portable mortgages allow you to transfer your existing mortgage (and current interest rate) to your new property, avoiding penalties and potentially saving thousands if rates have increased.

Working With Property Sisters

At Property Sisters, we coordinate the entire process of how to sell a house with a mortgage. We work closely with your lawyer, mortgage lender, and the buyer’s team to ensure a smooth transaction. We’ll help you understand all costs involved, including real estate commissions, legal fees, mortgage penalties, and any outstanding property taxes. Our knowledge of the Airdrie and Cochrane markets ensures your home is priced correctly to sell quickly while maximizing your equity.

We also connect you with mortgage professionals who can explain your options for penalty-free mortgage transfers or help you secure financing for your next property. Our goal is to make your transition seamless, whether you’re upsizing, downsizing, or relocating.

What You’ll Need

Your lawyer will require your mortgage account information, property tax statements, and a recent mortgage statement. We’ll help you gather all necessary documentation well before your closing date to avoid delays.

Selling a house with a mortgage is standard practice in Alberta real estate. With Property Sisters guiding you through every step, you can confidently move forward knowing your mortgage will be handled professionally and your equity protected.