What Is a Mortgage Deed?

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Mortgage deeds are formal, legally binding documents that confirm you are entering into a contract with your mortgage provider, secured against your property.

When you take out a mortgage, your lender takes a charge against the home, which means that if you fail to repay your mortgage, they could take possession of the property and sell it to recoup the debt – this is also called a legal charge.

The deed confirms the conditions of your mortgage, the total to be repaid, and the lending terms.

You will be asked to sign a mortgage deed if you purchase a property with a mortgage or take out a remortgage and renegotiate the terms of your original borrowing contract.

If you have any concerns about a mortgage deed or the terms, we suggest you contact Think Plutus or your solicitor to discuss before signing – this is a formal document that you must be 100% comfortable with before you commit.

Signing a Mortgage Deed

A mortgage lender will always ask you to sign a mortgage deed before they release your financing. Each deed is one or two pages long with a unique reference code linked to your property and identifies you as the borrower.

These documents include a snapshot of your borrowing agreement, including:

  • Conditions of the loan: the lender’s rights to repossess your assets if you do not repay the loan.
  • Repayment schedule: when you need to make each payment instalment, and how they will be calculated.
  • End of term date: the length of the mortgage, normally 25 years, and when you will have fully repaid the debt.
  • Interest rates: the rates your lender charges over the full loan, often with an initial fixed rate and ongoing variable rates.
  • Security taken: details of the security – usually the property – but also any other assets you have put forward as collateral, such as a second residence.

You must read the terms carefully and seek legal advice, if necessary, before you sign a mortgage deed.

The Importance of a Mortgage Deed

While applying for a mortgage inevitably involves lots of paperwork and signatures, the mortgage deed is the legal evidence that you have entered into your mortgage contract and assigned your property against the debt as security.

Deeds are legally binding, and you cannot later negotiate the terms – the only way your deed changes is if you remortgage and have a replacement document.

Lenders require mortgage deeds because they verify the security offered and act as a lien against the home. This confers the legal right to repossess and sell the property if the debt falls into serious arrears.

A mortgage deed is not the same thing as a mortgage offer.

The latter is simply the notification that your lender has approved your application and will be happy to proceed once you are ready to go or your offer has been accepted.

Mortgage offers detail the property, loan conditions and your information and set a time limit that shows how long the offer remains valid.

Your solicitor should review the mortgage offer and summarise any points of interest or concern, which you should work through carefully before you sign your mortgage deed.

mortgage deed example from Skipton Building Society 
Example Mortgage Deed from Skipton Building Society 

What to Consider Before Signing Your Mortgage Deed

Mortgage deeds are a normal part of the mortgage process. Still, any document that ties you into a long-term financial arrangement should be considered thoroughly before you sign.

If there is a condition or term you were unaware of, it could become an issue in the years ahead.

Before your sign, we recommend you:

  • Check that all the details are correct, including the property price, valuation, and your name.
  • Ensure you have an appropriate witness. We will look at this a little closer shortly, but your witness needs to be independent and cannot be a family member.
  • Inspect each of the terms and verify that they match your mortgage offer.

Lenders and conveyancers are used to addressing any questions, and it is far preferable to request clarity at this stage rather than signing a document with clauses you are unsure of.

How to Sign a Mortgage Deed

Like any legally binding document, signing a mortgage deed requires a witness who confirms you are who you say you are, they know you to be this person, and that you have provided a valid signature.

These requirements are the norm and attempt to prevent fraud.

Every person named on the mortgage will need to sign for themselves – you cannot sign on behalf of a partner or spouse.

Choosing a Mortgage Deed Witness

Your witness cannot be related to you, and they must be over 18 without any connection to the property – that excludes anyone who will live there, whether or not they are a signatory to the mortgage.

Witnesses must also have a separate address and include this on the paperwork; you might choose a conveyancer, solicitor, colleague or neighbour, for example.

If you need help finding a suitable witness or do not know anybody willing to sign on your behalf, your solicitor will normally provide this service for a small fee.

A signed deed without a witness is not valid and will not be accepted by the lender – the signature must also be ‘wet’, meaning it has to be signed in person and by hand, although there are circumstances where you can sign digitally.

Mortgage deeds are normally posted to you by the lender or sent through your solicitor.

Digital Mortgage Deeds

New rules introduced in 2021 mean that mortgage deeds can be executed digitally, but only for a remortgage.

HM Land Registry allows digital deeds only in remortgaging to try and reduce the time and paperwork associated with conveyancing transactions.

A lender will still create the form, and the details will need to be checked carefully because the document remains legally binding and enforceable – the only difference is how you receive the deed and sign it.

Digital deeds must be signed through the Gov.uk link provided, with an identity verification process. Once you have confirmed that all the information is accurate, you will enter a contact number and receive a unique code.

You enter your validation code, which acts in place of a signature and finalises the deed.

What Happens After I Have Signed a Mortgage Deed?

Once you have signed your mortgage deed, you are committed to making your mortgage repayments and adhering to the terms and conditions of your mortgage contract.

The final steps are to complete the transaction, which means:

  • Paying the deposit via your solicitor.
  • Exchanging contracts with the vendor.
  • Choosing a mutually convenient completion day.

After completion, you collect your keys and are the legal owner of the property.

Mortgage deeds remain valid for the duration of the mortgage agreement, so if you later remortgage, you will be asked to sign a new deed, which replaces the old one and is recorded at the Land Registry.

Professional Support With Signing a Mortgage Deed

We hope this guide gives you all the information you need to understand your mortgage deed, why it is important, and how to sign it to move ahead with your property purchase.

If you have any queries, concerns or questions about the terms of your deed, variances between a deed and your mortgage offer, or whether you should proceed, please contact Think Plutus.

We are a whole-of-market private mortgage broker and can steer you through the next steps if you wish to clarify terms or raise an issue with the conditions within your mortgage deed.

The key is always to take your time to review every detail and never sign a legally binding mortgage deed unless you are comfortable with the terms included.

Speak to a mortgage adviser today

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