Buying an Apartment That Still Has a Mortgage in Egypt: How to Do It Safely
You have found a resale apartment you like, and the seller tells you it was bought with a mortgage that still has installments left. Can it be sold to you, and how do you avoid paying for a home that a lender still has a claim on? The short answer: the sale is legally possible, but it needs the lender's consent and a clear plan for the remaining balance. This guide explains what Egypt's Real Estate Finance Law says and how to protect yourself.
Note: This is general information, not legal advice. Use a property lawyer before signing or paying anything.
Why a mortgaged apartment is different
Under Real Estate Finance Law 148/2001, as amended, the financing is secured by a privilege, a formal mortgage or other guarantees on the property itself. The lender therefore has a claim on the apartment, not just on the seller. Article 10 provides that the guarantee is recorded at the real estate registry office covering the property, so a registry search can reveal it.
Can the seller sell before paying off the loan?
Yes, with conditions. Article 7 allows the borrower to sell or otherwise dispose of the property only after the lender's consent, and the buyer must accept to take over the borrower's obligations under the financing agreement. In addition:
- The lender may refuse only for serious reasons that put its interests at risk.
- It must give written reasons within 30 days of being notified, or consent is deemed given.
- It may require the seller to stay jointly liable with the new buyer.
- Renting the property out needs the same consent.
Under Article 8, if the borrower sells or leases in breach of these rules, the lender can demand the full outstanding balance with at least 30 days' formal notice, then enforce against the property. That is the risk you must avoid.
Two common ways to close
| Route | How it works | Watch out for |
|---|---|---|
| Pay off first, then sell | Part of the price clears the loan early (Article 9 allows full or partial prepayment), the charge is removed, then the sale completes | Pay that part directly to the lender and get a clearance letter before releasing the rest |
| Take over the loan | The lender agrees that you replace the seller for the remaining installments | Not automatic; expect an income review and possibly joint liability with the seller |
Illustrative payment split
Assume an agreed price of EGP 2,000,000 and an outstanding balance of EGP 650,000 confirmed in writing by the lender (hypothetical figures):
| Payment | Amount (EGP) | Paid to |
|---|---|---|
| Loan payoff | 650,000 | Lender directly |
| Balance of price | 1,350,000 | Seller, after clearance and charge removal |
| Total | 2,000,000 | - |
Prepayment may carry fees under the loan contract, so get a dated payoff figure from the lender.
Checklist
- Ask directly whether the apartment is financed or mortgaged, and request the financing agreement.
- Get an official registry search on the property.
- Get a written payoff statement from the lender.
- Obtain the lender's written consent, or agree on full payoff before transfer.
- Pay the loan portion straight to the lender.
- Do not take possession or rent it out until the legal position is clear.
- Have a lawyer review everything, and check the title chain; see our guide on checking resale ownership documents.
FAQ
Is a preliminary contract alone enough?
No. Without lender consent the seller faces an immediate demand for the full balance and you may end up in a dispute.
How long does the lender have to respond?
It must state written reasons for refusal within 30 days of notice, otherwise consent is deemed given. Still, get explicit written consent.
Can I take over the remaining installments?
Yes, if the lender approves you as the new obligor, usually after reviewing your finances.
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