What is a Priority Amount on a mortgage?
The priority amount is a figure recorded on the mortgage. It generally reflects an amount of between 130% to 150% of the loan amount and is put in place to protect the lender (Bank). The priority amount is what the lender will receive up to (including principal, interest and other costs) when the property is sold either by forced or unforced sale. But the lender can only claim what is actually owed to them. So if your lending is less than the priority it can only claim the lower amount. If you owe more than the priority it makes it difficult for the bank to claim more especially if a second mortgage is also registered. It could put the bank at risk of losing money. The reason for this high priority amount is it allows the lender to increase its lending (top-ups etc) without having to vary its mortgage. The lender won't extend its lending over this priority figure unless the bank gets the priority amount increased through a solicitor (at your cost).