How to discharge your mortgage and what it means

family celebrating paying off their home loan

A mortgage discharge happens when you remove a home loan from the title of your property. Usually, when you have a home loan, the lender has the title - or ownership - of your home until the loan is repaid.

When do you have to discharge a mortgage?

A discharge is required in a variety of circumstances, not just when you pay off your loan in full. Below are some of the most common reasons for discharging your home loan:

You’ve paid your home loan in full

Once you've paid off the outstanding balance on your mortgage, you’ll have to go through the process of discharging the mortgage and getting the Certificate of Title registered with the Land Titles office.

You’re selling your home

When selling a home with a mortgage you’ll need to discharge it before any settlements are reached. If you want to move your current home loan to your next property you can apply for a substitution of security, which transfers the mortgage from the title of the property you’re selling to your new one.

You’re refinancing with a different lender

Refinancing your home loan will also require you to discharge your mortgage, as the new lender and mortgage will need to be on your property’s title.

How do I discharge a mortgage?

a hand holding a tiny house model

Discharging your mortgage isn’t complicated - the steps are as follows:

Notify your lender:

Reach out to your lender and discuss your plans to release the mortgage with them. Typically, lenders will ask you to complete a Discharge Authority form, which should be available on their website.

Complete and return the Discharge Authority form:

Be sure to properly fill out the form and lodge it with the right department in a timely manner.

Register your discharge and Certificate of Title:

After submitting your Discharge Authority form, your lender should prepare a Discharge Mortgage document. That document must be registered with the Land Titles office. Typically your lender does this on your behalf.

What is the cost of discharging a mortgage?

The potential cost of a mortgage discharge depends on the lender you are with. Some lenders will charge you a discharge or settlement fee when you end the terms of the contract with them. 

If you’re discharging from a home loan with a fixed rate, there is a chance you’ll need to pay a break cost for terminating the contract before the agreed upon time. 

Be sure to look closely at your home loan contract and check with your lender about what potential fees you’ll need to pay to discharge your mortgage. 

If you are looking to change your lender and refinance your loan, check our home loan refinance table below.

Home loan comparisons on Mozo - last updated 13 August 2022

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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