Why You Need to Discharge Your Mortgage Before Selling
If you’ve paid off your mortgage but it still appears on your property title, you might assume it’s just an administrative detail. However, failing to formally discharge your mortgage can lead to unexpected delays when selling your property.
What is a mortgage discharge?
A mortgage discharge is the official process of removing the lender’s registered interest from your property title. While you may have fully repaid your home loan, the mortgage remains on the title until the bank formally releases it.
Why is this necessary?
In the past, lenders provided homeowners with a release of mortgage document once the loan was repaid. It was then up to the homeowner to lodge this document with the titles office—often for a fee. However, many lenders didn’t clearly explain this process, leaving numerous properties with outdated mortgage records still registered on their titles.
Today, with electronic conveyancing, banks typically handle the process directly. However, if your mortgage is still listed on the title, it means your lender has not completed the discharge. This oversight can cause complications during settlement, as buyers and their legal representatives require a clear title to proceed with the transaction.
What should you do?
If a title search reveals a registered mortgage, it’s essential to take action before listing your property. Here’s what you should do:
Contact your ank – Ask if a mortgage discharge has been completed.
Complete a mortgage discharge form – If the mortgage is still on the title, your lender will provide a form to request its removal.
Allow processing time – Banks can take weeks to process a discharge, so start the process early to avoid settlement delays.
By ensuring your mortgage is properly discharged before selling, you can avoid unnecessary stress and keep your transaction on track. If you’re unsure about your title status, consult your real estate agent or conveyancer for guidance.
