Selling a mortgaged apartment in Estonia 2026 | Step-by-step guide

In brief

You can sell an apartment with a mortgage. In Estonia, this is a common notarial transaction. Start by asking your bank for the exact outstanding loan balance and any possible fees. Then check whether the buyer’s offer covers the loan balance and the costs related to the sale.

At the notary, the sale proceeds are first used to repay the bank. The remaining amount is transferred to you. Once the loan has been repaid, the bank gives its consent to delete the mortgage from the Land Register.

Introduction

One common concern among apartment sellers is: “I can’t sell my apartment because it has a mortgage.”

That is not how it works. A mortgage does not mean the apartment cannot be sold. It means the bank is one of the parties that must be accounted for in the transaction. The bank must receive the outstanding loan amount from the sale proceeds and agree to the deletion of the mortgage from the Land Register.

In this guide, we explain:

• how the sale of a mortgaged apartment works in practice;

• what the seller needs to do and what the bank does;

• when the seller receives the money;

• which issues can slow the sale down;

• how to avoid common mistakes.

Important: this article covers a standard home loan secured by a mortgage. If the apartment also has a bailiff’s seizure, a right of use, a debt claim, or another restriction, the situation should be reviewed separately.

What is a mortgage?

A mortgage is a security right registered in the Land Register. If you bought your apartment with a home loan, the bank registered a mortgage on the apartment. This gives the bank security that, if the loan is not repaid, it can recover its claim from the secured property.

Put simply:

• the apartment belongs to you;

• the bank has a registered security right over it;

• if the loan remains unpaid for a long time, the bank may eventually require the collateral to be sold;

• in a normal sale, the outstanding loan balance is paid to the bank from the sale proceeds;

• after the loan has been repaid, the mortgage can be deleted from the Land Register.

A mortgage and a home loan are not the same thing

These two terms are often confused.

• A home loan is a loan agreement with the bank. It is your financial obligation.

• A mortgage is the security registered against the apartment. It is visible in the Land Register.

When you repay the loan in full, the mortgage does not always disappear automatically. The bank’s consent and a Land Register entry are needed to delete it.

The sale process step by step

Step 1: ask the bank for the exact loan balance

First, contact the bank that issued your home loan. Ask them:

• how much is still outstanding and must be paid to the bank at the time of sale;

• whether there is a fee for early repayment;

• how the bank gives consent for the sale and for deleting the mortgage;

• what information the bank needs from the notary.

The bank may need a few business days to respond. It is best to get this information before you finally accept a buyer’s offer. This helps you avoid a situation where the sale price does not cover the loan balance or unexpected costs appear during the transaction.

Example:

• Original loan amount: €120,000

• Outstanding loan balance: €95,000

• Possible early repayment fee: €0–500

Step 2: check whether the buyer’s offer works

Once you know the outstanding loan balance, compare it with the buyer’s offer. The sale price should at least cover the amount payable to the bank. You should also factor in notary fees, bank fees, and other selling costs.

If the sale price is lower than the loan balance, you usually need to cover the difference yourself or make a separate agreement with the bank.

Example A — money remains after repayment

• Buyer’s offer: €110,000

• Loan balance payable to the bank: €95,000

• Amount left before costs: €15,000

This type of transaction is usually straightforward because the sale price covers the amount payable to the bank.

Example B — no money remains after repayment

• Buyer’s offer: €95,000

• Loan balance payable to the bank: €95,000

• Amount left before costs: €0

In this case, you need to remember that the selling costs must be covered separately.

Example C — the sale price does not cover the loan balance

• Buyer’s offer: €85,000

• Loan balance payable to the bank: €95,000

• Shortfall: €10,000

This type of transaction only makes sense if you have a clear plan for covering the shortfall or if the bank is willing to agree to special terms.

If the apartment’s market value is lower than the outstanding loan balance, this is sometimes referred to as a short sale situation. It means the property is sold for less than the loan balance, and the remaining debt must be negotiated separately with the bank. This is not the most common solution in Estonia, but it may be possible in some cases.

Step 3: put the agreement with the buyer in writing

If the offer is acceptable, the agreement should be recorded in writing. This may be a reservation agreement or another written confirmation.

The document should include:

• the agreed sale price;

• a note that the apartment has a mortgage;

• an explanation of how the sale proceeds will be divided between the bank and the seller;

• the expected date of the notarial transaction;

• terms for the situation where the bank does not give consent or the schedule changes.

A written agreement helps avoid confusion and gives both sides a clearer timeline.

Step 4: the bank gives official consent

Before the notarial transaction, the bank must confirm the conditions under which it will allow the mortgage to be deleted. Some banks issue this consent digitally. Others send the information directly to the notary.

The bank usually checks that:

• the sale price covers the amount payable to the bank;

• the transaction takes place before a notary;

• the loan balance is paid to the bank according to the agreed process;

• all documents needed to delete the mortgage are available.

This usually takes 5–10 business days, but the timing depends on the bank, the complexity of the transaction, and how quickly the required information is provided.

Step 5: the notarial transaction takes place

The sale agreement is signed before a notary. In a mortgaged apartment sale, the most important part is the movement of money.

The usual order is as follows:

1. The buyer or the buyer’s bank transfers the sale amount according to the notary’s instructions.

2. The notary accounts for the bank’s claim and payment deadline.

3. The outstanding loan balance is paid to the bank from the sale proceeds.

4. The remaining amount is transferred to the seller.

5. The bank confirms that the loan has been repaid.

6. The deletion of the mortgage is submitted to the Land Register.

All of these steps are written into the notarial agreement. This makes it clear to the buyer, seller, and bank how the money moves and when ownership is transferred.

Step 6: the money arrives and the mortgage is deleted

After the notarial transaction, the full amount may not reach the seller’s account on the same day. In most cases, the money first goes toward repaying the bank, and the remaining amount is then transferred to the seller.

A typical timeline may look like this:

• Business day 1: the loan balance is paid to the bank;

• Business day 2: the bank confirms receipt of the payment;

• Business day 3: the remaining amount is transferred to the seller;

• following business days: the mortgage deletion is processed in the Land Register.

The exact timeline depends on the bank, the notary, and the payment setup used in the transaction.

Special situations

The apartment has several mortgages

If the apartment has several mortgages, they must be repaid in order of priority. The first-ranking mortgage is handled first, followed by the next ones.

In this case, consent is needed from all mortgage holders. The transaction usually takes longer because the notary and the banks need to coordinate the conditions.

The apartment has several owners

If the apartment has several owners, all owners must agree to the sale. If the apartment is marital joint property, both spouses usually need to consent, even if only one spouse is listed as the owner in the Land Register.

In the case of divorce or division of property, the sale may be more complicated. Before agreeing on terms with a buyer, it is worth confirming who can sign the sale agreement and how the sale proceeds will be divided.

The apartment has other restrictions besides the mortgage

A mortgage may not be the only entry affecting the sale. The apartment may also have:

• a bailiff’s seizure;

• a right of use;

• a servitude;

• another debt claim or restriction.

These do not always make the sale impossible, but they do make the transaction more complex. Each such issue should be reviewed before making a final agreement with the buyer.

The loan balance is higher than the apartment’s value

If the expected sale price is lower than the outstanding amount owed to the bank, the sale becomes more difficult.

Possible options include:

1. Cover the shortfall yourself
If the sale price is lower than the loan balance, you can pay the difference yourself.

2. Negotiate special terms with the bank
In some cases, the bank may consider a short sale or another arrangement. This depends on the bank, the loan agreement, and your ability to pay.

3. Wait for a better sale price
If there is no urgent need to sell, it may be reasonable to wait for the market to improve or consider other options.

4. Avoid a forced sale if possible
A forced sale is usually worse for the seller because the price may end up below market value, and part of the debt may still remain.

Common mistakes when selling a mortgaged apartment

Mistake 1: accepting an offer before speaking to the bank

Some sellers agree on a price with the buyer before they know the exact loan balance. Later, it may turn out that the sale price does not cover the amount payable to the bank or that an early repayment fee applies.

Better approach: ask the bank for the loan balance and possible fees before you finally accept the buyer’s offer.

Mistake 2: not mentioning the mortgage early enough

A mortgage is visible in the Land Register and will come up during the notarial transaction anyway. If the buyer only hears about it late in the process, it can reduce trust.

Better approach: tell the buyer from the start that the apartment has a mortgage and that it will be deleted as part of the transaction.

Mistake 3: forgetting about an early repayment fee

Some loan agreements may include a fee or compensation if you repay the loan ahead of schedule. This depends on the bank, the loan agreement, and the type of interest rate.

Better approach: ask the bank in writing how much must be paid on the sale date and whether any fee applies.

Mistake 4: not accounting for a tenant

If a tenant lives in the apartment, the sale may take longer. The buyer will want to know whether the lease continues, when the apartment will be vacated, and under what conditions the buyer can take possession.

Better approach: review the lease before selling and tell the buyer clearly when the apartment will be available.

Mistake 5: setting an overly optimistic timeline

Bank consent, the notary appointment, and the movement of money all take time. If you promise the buyer a very tight deadline, the transaction may become unnecessarily stressful.

Better approach: leave some buffer in the timeline. Selling a mortgaged apartment can be quick, but the bank and the notary still need time to complete their steps.

Costs when selling a mortgaged apartment

Costs depend on the transaction, the bank, the notary, and the agreement with the buyer. In most cases, you should consider the following costs.

Before confirming the price, it is worth calculating these costs. This helps you understand how much money you will actually receive from the sale.

Frequently asked questions

Can you sell an apartment with a mortgage?

Yes, in most cases you can. A mortgage does not mean the sale is prohibited. It means the outstanding loan balance must first be paid to the bank from the sale proceeds, and the mortgage is deleted as part of the transaction.

What happens if the sale price does not cover the full loan balance?

You usually need to cover the shortfall yourself or agree on special terms with the bank. If neither option works, it may be better to wait before selling.

How long does bank consent take?

Usually 5–10 business days, but it depends on the bank and the complexity of the transaction. If the sale needs to move quickly, contact the bank as early as possible.

Do I need to notify the bank before accepting the buyer’s offer?

It may not be mandatory in every case, but it is very sensible. This way you can confirm the exact loan balance, possible fees, and the bank’s requirements for the transaction.

Can the buyer’s bank loan be used to delete my mortgage?

Yes. If the buyer purchases the apartment with a bank loan, the money usually moves according to the notary’s instructions. Your loan balance is paid from the sale proceeds, and the remaining amount is transferred to you.

Can I repay the loan early?

A home loan can usually be repaid before the end of the loan term. However, the agreement may include a fee or compensation, especially if the loan has a fixed interest rate. The exact amount should be confirmed with the bank.

What is a short sale?

A short sale means the apartment is sold for a price that does not cover the full loan balance. In that case, the bank must agree to the transaction, and the remaining debt must be dealt with separately.

Can I sell if I have other debts besides the mortgage?

It depends on the type of debt and whether any restrictions have been registered against the apartment. A bailiff’s seizure may block the sale. An apartment association debt or another claim may be payable from the sale proceeds, but this must be clarified before the transaction.

Does a mortgage reduce the apartment’s price?

A mortgage alone usually does not reduce the market value, because it is deleted during the sale. The price is more likely to be affected by other issues, such as seizures, a tenant, poor condition, or a very urgent need to sell.

If the loan was taken for 20 years, can I sell before the term ends?

Yes. You can sell the apartment before the loan term ends. The sale proceeds are used to repay the outstanding loan balance, and the mortgage is deleted.

Summary

Selling a mortgaged apartment is a common transaction in Estonia. The most important steps are to know the exact loan balance, speak to the bank early, and clearly describe the movement of money in the notarial agreement.

The sale is easier when:

• the sale price covers the outstanding loan balance payable to the bank;

• the bank gives consent to delete the mortgage;

• the buyer knows about the mortgage from the start;

• all costs are calculated before the price is confirmed;

• the notary has the bank’s information and the required documents.

If the sale price does not cover the loan balance or the apartment has other restrictions, it is worth getting advice before the transaction. This helps avoid a situation where the sale gets stuck at the notary at the last moment.

Need help selling an apartment with a mortgage?

We have experience with mortgaged apartments and different bank-related situations. We can help you understand whether the sale is possible, how much money you may receive from it, and which steps must be completed before the notary appointment.

We offer:

• ✓ a free initial consultation about your situation;

• ✓ help with communicating with the bank;

• ✓ a clear overview of the costs related to the sale;

• ✓ the option to move to a transaction within 7–14 days if the documents and bank consent are in order.

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