When you purchase a property using a home loan from a lender, your lender (“mortgagee”) holds your property as security for the repayment of your loan. This means your lender possesses certain rights in relation to your property, including the right to control and deal with the property and the right to sell off your property in the event that you default on your loan repayment obligations. This security is registered in the form of a mortgage on your property title. This mortgage will remain on your property and appear on title until it is formally removed, or “discharged”.

Typically, when you have repaid your loan in full, you will need to contact your lender to have them discharge this mortgage from your property title. Some lenders do not automatically attend to the discharge of mortgage once a loan has been repaid. To discharge the mortgage, your lender may require you to complete a ‘discharge authority form’. This form provides instructions to your lender to release their interest in your property being held as security for your loan. Once your lender has registered the discharge of mortgage, your lender will no longer appear on title and relinquishes their rights to your property with respect to this mortgage.

If you are selling your property and there is still an amount outstanding on your loan, this will be repaid to your lender on settlement from the proceeds received from the sale of your property. Your lender will simultaneously discharge the mortgage on settlement so that this mortgage will no longer appear on title when the property is transferred to the new owners.

For this to occur, you will need to contact your lender at least two to four weeks prior to settlement to notify them of your intention to sell the property and to arrange for the discharge of mortgage. You do not need to contact your lender to commence this process until a purchaser has been found and contracts have exchanged unconditionally (i.e. when the contract of sale becomes binding on all parties). Similarly, your lender will require you to complete a discharge authority form to commence the discharge process. You will need to complete this form and return a copy to your lender. You should also forward a copy of this completed form to your solicitor or conveyancer so that they can coordinate the discharge of mortgage with your lender for settlement. Settlement cannot be completed until your mortgage has been discharged from title.

How can we help?

Although arranging a discharge of mortgage may be a straightforward process, timing is key to ensuring that all lender requirements are met to enable settlement to proceed without delay. Contact our experienced property team at Antunes Lawyers on 02 9964 0499 to help you streamline the process for a seamless settlement.

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The articles on this website comprise legal general information and not legal advice. The general information presented here must not be relied upon without legal advice being sought. In the event that you wish to obtain legal advice on the contents of this general information you may do so by contacting our office or your existing solicitor.