Unencumbered Mortgages | Compare Mortgages | NatWest (2024)

An unencumbered mortgage is a type of mortgage you take out on a property that you own outright. This sets it apart from a regular mortgage, which you’d use to purchase or refinance a property that you haven’t fully paid for yet.

It lets you release equity from your home so that you can use it for something else, like home improvements.

An unencumbered mortgage is a mortgage that you would get on a property that has no current mortgages or charges on it. Forexample, you could have paid off your mortgage in full, inherited a mortgage-free home, or purchased a property without needing a mortgage.

If you were to take out another mortgage on this property, this could free up a lump sum of money from the bank which you could then use for another purpose.

This is similar to a remortgage as you’re releasing equity from a property by borrowing money against its value, exceptanunencumbered mortgage is a new mortgage on the property.

There are a number of reasons why you may consider an unencumbered mortgage. These include:

• home improvements, like a renovation project
• putting down a deposit on a new property
• purchasing a new or used car
  
• a major family event, like a holiday or wedding.

Unencumbered mortgage criteria is largely similar to a regular one. However, the main difference is you’ll first need to own your property outright.

Your first step to getting anunencumbered mortgage is to get an Agreement in Principle for a mortgage with us. This takes roughly 10 minutes and will not impact your credit score.

Once you have an Agreement in Principle, you'll be able to review the mortgages available to you dependent on your loan-to-value (LTV).

LTV is the amount you borrow vs. the value of the property. So, if you borrow £100,000 on a property worth £200,000, then your LTV is 50%. The lower the LTV, the lower the likely interest rate and the greater potential choice of deals for you.