Mortgage a property you own outright

Unencumbered mortgages

NatWest mortgages are available to over 18s. Your property may be repossessed if you do not keep up repayments on your mortgage. The content on this page is guidance only and does not constitute advice.
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What is an unencumbered mortgage?

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.

How does an unencumbered mortgage work?

An unencumbered mortgage is a mortgage that you would get on a property that has no current mortgages or charges on it. For example, 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, except an unencumbered mortgage is a new mortgage on the property.

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Why would I need an unencumbered mortgage?

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.


What should I consider with an unencumbered mortgage?


Like any other borrowing on your home, you’ll need to pay your unencumbered mortgage every month, with fees and interest too. Make sure you can afford to do this before you apply.

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Like any mortgage, you could lose your home if you don’t keep up with payments.

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You may need to pay your mortgage back for a number of years, which may mean paying a lot of interest. So, think carefully about whether there may be more cost effective ways of borrowing the money. 

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Am I eligible for an unencumbered mortgage?

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 an unencumbered 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.

How to apply for an unencumbered mortgage

Step 1: See how much you could borrow

  • Get a personalised indication of how much you could borrow in less than 10 minutes. 
  • It will not impact your credit score.

Step 2: Ready to apply?

  • Apply online today or contact us to get advice. 
  • Save progress and come back whenever you like.

Unencumbered mortgage FAQs