A mortgage deed – also known as a legal charge – is a legally binding agreement between you and your mortgage lender. It confirms that you agree to  the conditions of your mortgage, including how and when it will be repaid. 

You will sign  a mortgage deed if you are:

  • Buying a home with a mortgage
  • Remortgaging your home – meaning you’re renegotiating the terms of your original mortgage

Mortgage deeds explained 

Your mortgage is the loan given to you by a lender (usually a bank or building society) to buy your new home. 

The mortgage deed is the legal document that goes with it.

It’s usually about 1 or 2 pages in length and has its own unique reference number, which identifies you as the borrower. 

You sign a  mortgage deed to agree to the conditions in the mortgage offer, which include: 

  • Conditions. If you can’t pay back the loan, the lender has a legal right to specific assets, which, in this case, is the home you are buying.
  • Repayment schedule. This sets out when you’ll pay back the loan and at what cost. It will outline:
  • Length of mortgage. Generally speaking, the longer you spend paying back your mortgage, the less money you’ll pay a month, but the more money you will pay in total. 
  • Mortgage rates. That’s the amount of interest due on the amount that you owe. Depending on your mortgage deal, your rate will either be fixed (where it stays the same for a set amount of time) or variable (where the interest rate changes over time in line with the market interest rates).

Here’s why your mortgage deed matters 

Your mortgage deed is important because it’s legally binding. 

Even though they inspect your financials in great detail before offering you a mortgage, your lender still needs to know that if things go belly up, they’re not left with nothing. A mortgage deed is a promise to them they can count on you to repay the loan according to the plan you’ve agreed on.

So what happens if life takes a turn and you can’t repay your mortgage as you intended to?

The mortgage deed gives your lender what is called a lien on your home – a legal right to your property if you can’t repay the debt according to the terms you agreed on. If you’re unable to pay, your lender can sell the home to repay the debt. 

Mortgage deed and mortgage offer. Are they the same?

Mortgage offers and mortgage deeds are two different steps in the same process. 

First, you’ll get a mortgage offer (or offer of advance), to say that the lender has approved your mortgage application. This means they’ve got all the information they need about your finances and the property you have your eye on, and they’re ready to take things to the next level.  

The mortgage offer will include your personal details, the property information, and the conditions of the loan they will offer you. There’s usually a time limit on how long you can take to accept the offer they’ve made.

Your conveyancer will review your mortgage offer and prepare a report for you which summarises the important bits. When they send you the report, they’ll also send you the mortgage deed to sign.  

Signing your mortgage deed is how you legally confirm that you agree to the terms of your mortgage offer. It’s only once this is signed that the mortgage is legally in place. You return the signed mortgage deed to your conveyancer.

When does a mortgage deed end?

The mortgage deed is valid as long as you have that mortgage. If you remortgage with a different lender later on, you sign a new mortgage deed for that lender, and your conveyancer will replace the old one at the Land Registry.  

Steps of signing your mortgage deed

  1. Check that your details are correct. Go over:
  • Your personal information
  • The property details
  1. Agree that you’re happy with the terms and conditions of the mortgage. Read them in detail. Read them again. Ask questions if you don’t understand anything.
  1. Sign the deed. Signing the deed means you’re happy to proceed with the terms of your mortgage offer. You’ll need to go through this step before the house is officially in your name. 

If anyone else’s name is on the mortgage – a partner or a parent, for instance – they’ll have to sign too.

Your conveyancer will post you the deed. You’ll review it, sign it in front of a witness, and then send it back to them.

Signing the deed means you’re happy to proceed with the terms of your mortgage offer.

Who can be a witness on a mortgage deed?

Your witness has to be: 

  • Someone you’re not related to
  • A person with no interests or connections to the property
  • Over 18 years old
  • Living in a different place to you

Your conveyancer can be your witness. So can a neighbour or colleague.

So I’ve signed the mortgage deed. Now what?

Signing the mortgage deed means you’re now obliged to make the payments as set out in your mortgage offer for the time you’ve agreed to. 

It also means that you're very close to owning a new home.

Now it’s time to get to work on sealing the deal. This process is called “completion” and involves:

  • Paying your deposit. You’ll pay your lawyer and they’ll get the money to the seller (or the bank if the seller is still paying off a mortgage).
  • Exchanging contracts with the seller. Your lawyer will talk to their lawyer to get these drawn up. Once you exchange contracts, they are legally binding, meaning neither you nor the seller can back out.
  • Deciding on a completion day. This is the day you get the keys to your new home. 🎉