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Done with your home loan? How to discharge your mortgage and what it means
![Family celebrating paying off their home loan and discharging their mortgage by their house.](https://cdn.mozo.com.au/images/atwood/13519/2.png)
Home loans end for a variety of reasons, so it's important to know what to do when time is up.
Your lender's name is on your Certificate of Title (i.e. the deed to your home) until the mortgage is fully repaid, refinanced, or sold to a new owner. Therefore, a mortgage discharge is the process of removing a home loan from the title of your property.
A mortgage discharge is different from foreclosure (the lender seizes control of the property) and settlement (you officially agree to pay back your home loan).
So what happens during a mortgage discharge? Are there costs involved? And what's the process? Let's break down what happens when your home loan ends.
When to get a mortgage discharge
![Family sheltering under discharge mortgage fake house.](https://cdn.mozo.com.au/images/atwood/13519/3.png)
A mortgage discharge is required in a variety of home buying situations. Below are some of the most common reasons for discharging a mortgage.
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 get a mortgage discharge before any settlements are reached. This removes your lender's name (and your own) from the title of property so the new owner can register their own.
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 home loan lender
Refinancing your home loan will also require you to discharge your current mortgage, as the new lender and mortgage will need to be on your property’s title. This is sometimes called a "partial discharge" since you'll still have outstanding debt against the property.
How do I discharge a mortgage?
![Discharge of mortgage process flow chart infographic](https://cdn.mozo.com.au/images/atwood/13519/1.png)
Discharging your mortgage isn’t complicated in practice, it'll just take a bit of planning and paperwork. Here is the basic process of how to discharge your mortgage.
Step 1: Get your paperwork ready
An ounce of preparation, hey? To discharge your mortgage, you'll need the following information or home loan documents on hand:
- Legal names of everyone on your home loan, such as your partner or guarantor.
- Your property details, including certificate of title and address.
- Your home loan account number(s), including offset accounts or redraw facilities.
- A way to pay discharge fees, such as a credit card.
- Contact details for your mortgage broker, conveyancer, or other financial institutions that helped you take out the initial home loan (such as first home buyers grants).
- Your outstanding loan amount and loan-to-value ratio (LVR) or home equity, if you're refinancing.
Those selling their properties may also need the contract of sale.
Step 2: Notify your lender
Let your current home loan lender know you plan to discharge the mortgage. Typically, lenders will ask you to complete a discharge authority form, which should be available on their website.
A discharge authority form tells your home loan lender to start the mortgage discharge process and release the security of your home loan back to you.
Now is a good time to ask questions, too, like what discharge fees apply and how long the discharge process will take. Typically, the process takes 10 - 15 business days.
Step 3: 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. Now is the time to pay any break costs or discharge fees, too.
Step 4: Register your discharge and Certificate of Title
After submitting your discharge authority form, your lender will review it. It everything looks correct, they will prepare a discharge mortgage document.
The discharge mortgage document must be registered with your state land title office. Usually the lender sends it for you — if they don't, you have to do it.
Once the land titles office approves the mortgage discharge, your home loan will get scrubbed from the title of your property. Now you can refinance, sell, or enjoy the home you officially own.
Calculators
Budget for discharge fees! See all
How much does a mortgage discharge cost?
The cost of discharging your mortgage depends on your home loan lender. Some lenders charge a discharge or settlement fee when you end the terms of contract with them, usually between $100 - $300. Others will have no ending fees at all.
While it's a relatively minor cost next to mortgage repayments or stamp duty, discharge fees are still worthwhile to consider when comparing home loans. You can find what fees apply to a mortgage by looking at the product disclosure statement (PDS) and target market determinations (TMD).
If you’re discharging from a home loan with a fixed rate and your fixed term hasn't ended yet, there is a chance you’ll need to pay a break cost for terminating the contract before the agreed upon time.
This fixed rate break cost can be significant, so it's worthwhile looking at this fee ahead of time before your fix your home loan interest rate at all.
Ready to refinance your home loan? Compare options in the table below.
Compare refinance home loans
-
Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
-
Basic Home Loan
Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.16% p.a.Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
CompareCompareBasic Home Loan
Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Macquarie Basic Home Loan
-
Discount Great Rate Home Loan
Owner Occupier, Principal & Interest, LVR<80%, over $150k
interest rate
comparison rate
Initial monthly repayment6.04% p.a. variable6.06% p.a.An easy to use Home Loan with no establishment fee and no monthly or annual fees. Minimum deposit of 20% is required. Mozo Experts Choice Awards - Investor Home Loan Award 2024^.
CompareCompareDiscount Great Rate Home Loan
An easy to use Home Loan with no establishment fee and no monthly or annual fees. Minimum deposit of 20% is required. Mozo Experts Choice Awards - Investor Home Loan Award 2024^.
- interest rate
- 6.04% p.a. variable
- comparison rate
- 6.06% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $2,000 cashback for loans more than of equal to $250,000 with LVR <80%, or $2,500 cashback for loans more than or equal to $500,000 with LVR <80%. Applications from 1 June 2024, loan must be drawn down within 90 days from approval.
Read our Mozo Review to learn more about the Greater Bank Discount Great Rate Home Loan
-
Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Investment, LVR <80%
interest rate
comparison rate
Initial monthly repayment6.29% p.a. variable6.20% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- interest rate
- 6.29% p.a. variable
- comparison rate
- 6.20% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
-
Fixed Rate
Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment6.54% p.a.
fixed 2 years7.10% p.a.Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.
CompareCompareFixed Rate
Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.
- interest rate
- 6.59% p.a.
fixed 3 years
- comparison rate
- 7.06% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $160.00
- Extra repayments
- yes - free up to to lesser of 5% of original fixed loan amount, or $5,000 each year
- Redraw facility
- no
- Offset account
- Optional - $10 per month - 1 year fixed term only
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $20,000
- maximum borrowing amount
- -
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $3,000 cashback for eligible First Home Buyers, $2,000 cashback when you refinance loans of $250k+, apply from 1 Dec 2022, settle within 180 days.
Read our Mozo Review to learn more about the ANZ Fixed Rate
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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. You can change the loan amount and term in the input boxes at the top of this table. 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.
^See information about the Mozo Experts Choice Home Loan Awards
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