The concept of “mortgage with overage” has gained significant attention in property transactions. It refers to a mortgage agreement that includes overage clauses, which entail additional payments triggered by specific events, such as the granting of planning permission or the subsequent sale of the property. In this comprehensive article, we will delve into the various aspects of mortgage with overage, exploring topics such as overage clauses, mortgage lenders, future buyers, potential buyers, planning permission, mortgages on properties, mainstream lenders, the mortgage process, mortgage advisers, country property mortgage applications, expert mortgage advisers, and more. We will discuss the implications of overage in the mortgage process and provide guidance for those seeking mortgages with overage options.

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Understanding Overage Clauses and Mortgage Lenders

An overage clause is a contractual provision that outlines the conditions under which an additional payment, known as overage, will be made by the buyer to the seller. These clauses are inserted into mortgage agreements to ensure that the seller benefits from any increase in property value resulting from specific events. Mortgage lenders, the key players in mortgage transactions, evaluate the borrower’s eligibility and the property’s value, including potential overage payments. It is important for borrowers to work closely with mortgage lenders who understand and can accommodate mortgages with overage clauses.

Understanding Mortgage with Overage

A mortgage with overage, also known as an overage clause or uplift clause, is a contractual agreement that obligates the buyer to make additional payments to the seller after the completion of a property transaction. This usually happens when certain conditions, known as ‘trigger events’, are met. These could include the granting or implementation of planning permission, the sale of new units built on the land, or a subsequent sale of the land at a higher value.

Overage clauses are commonly used in transactions involving large sites, bare land, and land ripe for development. They allow the seller to benefit from any future increases in the value of the property, often resulting from planning permission or changes in land use.

Navigating the Mortgage Process with Overage Clauses

When applying for a mortgage with overage clauses, potential buyers should be aware of the challenges and considerations involved. It is important to thoroughly research and understand the specific requirements of mainstream lenders who offer mortgage products with overage provisions. Working with a mortgage adviser experienced in handling overage clauses can provide valuable insights into the mortgage process and help borrowers identify suitable mortgage options. Mortgage advisers, mortgage companies, and mortgage experts can guide borrowers through the mortgage questionnaire, assess mortgage requirements, and offer a range of mortgage options tailored to their needs.

The Impact on Mortgage Lending

It’s important to note that most high-street residential lenders in the UK do not issue mortgage offers or lend against properties affected by overage. This is because the overage clause can complicate the lending process and potentially affect the property’s value. However, some lenders may consider properties with an overage clause, typically lending up to 50% Loan-to-Value (LTV).

Types of Mortgages for Properties with Overage Clauses

Residential mortgages are the most common type of mortgages used for properties with overage clauses. Buyers seeking mortgage financing for properties with overage agreements can choose from various mortgage options, including standard mortgages, tracker rate mortgages, and urban property mortgages. Buyers interested in purchasing a house with land attached should work closely with mortgage lenders who understand the unique considerations associated with these types of properties. Lenders will assess the value of the land, the plot size, and any potential overage conditions.

Legal Considerations and Advice on Overage Agreements

Navigating overage agreements requires careful legal advice. Buyers and sellers should consult with legal professionals experienced in overage agreements to ensure that the terms and conditions are properly drafted, protecting the interests of both parties. Legal advisers can provide guidance on the grant of planning permission, complex conditions associated with overage clauses, legal charges, resale restrictions, and other sensitive aspects. The wording of restrictions is crucial to avoid potential conflicts or misunderstandings. Legal advisers can help ensure that the overage agreement complies with current regulations and that the rights and obligations of both parties are clearly defined.

Overage Clauses and Building Developers

Building developers often encounter overage clauses when acquiring land for development purposes. These clauses allow the landowner to benefit from any increase in the property’s value resulting from the developer’s efforts. Understanding the potential overage conditions and charges associated with a particular piece of land is crucial for developers to accurately assess the financial viability of a project. Legal and financial advisers can assist developers in evaluating overage agreements and structuring deals that align with their business objectives.

Maximizing Profits and Market Trends

Mortgages with overage clauses offer an opportunity for buyers to secure a property with the potential for a quick profit. By agreeing to share a percentage of future profits with the seller, buyers can capitalize on market trends and the increasing value of the property.

However, timing is crucial in maximizing profits. Overage agreements are often time-sensitive, with a set period for triggering the payment. Buyers should closely monitor market trends and property valuations to ensure they can sell the property within the specified timeframe and maximize their return on investment.


A mortgage with overage presents both opportunities and challenges in property transactions. Understanding the intricacies of overage clauses, mortgage lenders’ requirements, and legal considerations is essential for buyers seeking mortgages on properties with overage provisions. Working closely with expert mortgage advisers, legal professionals, and financial advisers can ensure a smooth mortgage process and protect the interests of all parties involved. By carefully evaluating the market trends, adhering to overage conditions, and obtaining comprehensive legal advice, buyers can maximize their profits while building a secure financial future.

Damian Youell

Feel Free To Start WhatsApp Chat With Us...

How We Work

1: We contact you and take down your details, income outgoings, name, address etc.

2: We will research the whole market and email you a detailed quote as well as a list of documents to proceed.

3: You upload the documents and information needed via our channel our online portal.

Feel Free to Contact Us


What is the loophole of the overage clause?

The specifics of the overage clause can vary, and loopholes may exist depending on the wording of the agreement. It’s crucial to seek legal advice to understand the implications fully.

How do I get out of an overage agreement?

Getting out of an overage agreement can be complex and depends on the terms of the agreement. Legal advice should be sought.

How long can an overage last?

The duration of an overage agreement can be determined by the parties involved, with no minimum period and a maximum of eighty years.

What is a typical overage clause?

A typical overage clause stipulates that the buyer will pay the seller an additional sum if certain conditions are met, usually related to increases in the property’s value.

About The Author

mortgage broker damian youell

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Damian is an experienced mortgage broker, founder of Ltd and company director. With over a decade working as a mortgage broker he has a strong understanding of hard to place mortgage cases. With hundreds of 5 star client reviews. hundreds of repeat clients his work speaks for himself.

He started as a one man band with the philosophy of putting clients needs ahead of his own. This ethos of offering excellent customer service has helped the business grow over the years. He gets satisfaction on getting cases pushed through to offer stage where other mortgage broker and companies have failed.

Throughout his time as an adviser he has carved out a niche area of advice helping clients with their business protection requirements too. Having helped hundreds of client with Relevant Life Policies, Shareholder Protection Insurance, Keyperson Policies and other important protection requirements of large to small businesses.

At home he is a family man and likes to spend his time with his four children and wife Lisa. He enjoys going on holidays spending time with friends and going for walks.