Redeeming Your Existing Mortgage

Redemption figures, accountable trust receipts and undertakings — the machinery that lets one loan replace another in a single day.

Redemption is the payment that clears your existing mortgage, and it is the hinge of every remortgage: the new lender will not have a first legal charge until the old lender's charge is released, and the old lender will not release until it is paid in full. The conveyancing system bridges that circle with solicitor undertakings, which is why the remortgage completes in a day even though the paperwork trails on afterwards.

The accountable trust receipt

Early in the transaction your solicitor requests the title deeds from your current lender on accountable trust receipt (ATR) — a formal undertaking that the deeds are held in trust for the lender and will either be returned or the loan redeemed. The ATR is what allows the title to be investigated while the old mortgage is still live.

Lenders process deeds requests through centralised securities units, and turnaround is the least predictable part of the remortgage. The request should go in the day you instruct, not the day the loan offer arrives.

The redemption figure

A redemption figure is the lender's written statement of exactly what clears the loan on a stated date: principal, accrued interest, any fees, and — on some fixed rates — a break funding fee. It quotes a daily rate of interest so the figure can be adjusted if completion moves within its validity window.

Two practical rules. First, order the figure to land shortly before the expected drawdown so it is fresh. Second, if you are on a fixed rate, get an early indicative break fee quotation too — break fees move with market rates and can change the economics of the switch. Our switching guide covers how those fees are capped by the 2016 Mortgage Credit Regulations.

Completion: undertakings do the lifting

On completion, the new lender releases funds against your solicitor's undertaking to redeem the old mortgage, procure the discharge, and register the new charge as a first legal charge. Your solicitor sends the redemption amount to the old lender the same day. From that moment your debt to the old lender is cleared, even though its charge still shows on the folio for a little longer.

Solicitors' undertakings are enforceable professional obligations — the Law Society's regulation of them is what makes lenders willing to advance seven-figure sums against a letter. It is also why solicitors are exacting about the conditions being right before completing: an undertaking given cannot quietly be unwound.

Discharge and release of the old charge

After redemption, the old lender issues its discharge. For Land Registry titles most lenders now use eDischarge, releasing the charge electronically; others issue a deed of discharge or release that is lodged for registration. Your solicitor chases this as a matter of course — an unreleased charge from a redeemed loan is precisely the title issue that delays the next transaction a decade later.

Your deeds after it is all over

Once the new charge is registered, the certificate of title and the documents the new lender requires are lodged with it, and it holds them for the life of the loan. Original documents the lender does not need are returned to you — keep them safe, and keep copies of everything digital. When you eventually redeem this mortgage without replacing it, the discharge should be registered immediately, so your folio is clean when you or your estate next need it.

Frequently asked questions

What is an accountable trust receipt?

A solicitor's undertaking to a lender: release the title deeds to me and I will hold them in trust for you, returning them or redeeming the mortgage. It is how title is investigated while the old loan is still secured.

How long is a redemption figure valid?

Each figure states its own validity and a daily interest rate for adjustment within that window. Because figures go stale, they are ordered to line up with the expected completion date and refreshed if the transaction moves.

Is there a penalty for redeeming early?

On variable rates, generally no. On fixed rates an early redemption charge may apply, capped at the lender's actual funding loss under the Mortgage Credit Regulations 2016 — it can be substantial or zero depending on market movements. Always get a written quotation.

When does the old bank release its charge?

After it receives the redemption amount, it issues an eDischarge or deed of discharge, and the charge is cancelled on the folio. Your new loan will already have drawn down on your solicitor's undertaking in the meantime.

Who holds my deeds after the remortgage?

The new lender holds the certificate of title and required documents for the life of the loan. Anything it does not require is returned to you.

Talk to a remortgage solicitor

Mary Molloy Solicitors acts for homeowners and property owners across Ireland on remortgages, switches, top-ups and transfers of equity. All enquiries are handled through our Dublin office.

This page contains general information about Irish law and practice. It is not legal advice, it may not reflect your circumstances, and reading it does not create a solicitor–client relationship with Mary Molloy Solicitors. We do not advise on taxation; please speak to your accountant or Revenue. In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.