Whether you are selling, refinancing and making that final mortgage repayment on your home loan, you will need to discharge your mortgage from the lender if you want them to release their caveat on your property.

In the case of a property sale or loan refinance, the discharge occurs at settlement of the loan and the lender (plus the solicitor or conveyancer, involved in the transaction) will act on your behalf and request the relevant change to be made by the Land Titles Office of the State the property is located in.

On making the final mortgage repayment to pay off your home loan balance, you can request that the lender discharge their mortgage so that your property becomes unencumbered and has a clear title.

Where you have future investment plans that will require you to draw upon the equity, you can consider keeping your mortgage with the lender with a zero-loan balance so that you do not have to pay the mortgage discharge fee as well as mortgage registration fee when using the equity available in the debt free property.

A few important notes:

Lenders charge a discharge fee when you end your mortgage with them. The fee pays for their costs to remove their mortgage charge against the title of your property.

·       Discharge fees change and vary between lenders so always confirm the exact fee with your lender.

·       Lenders discharge fees do not include government title registration and transfer fees. Any fee payable to the relevant state government is additional cost to you.

·       Lenders require a discharge authority form specific to them to be complete by the borrowers and a copy to be submitted to the lender holding the mortgage. Most lenders require that the borrowers complete and submit a discharge request in branch as it enables them to try and talk the borrowers from refinancing out, if that’s the reason for the discharge request.

·       You can find discharge authority instructions and forms for most lender here.  

When refinancing, download your current lenders discharge authority form, complete as required and provide loansHub as well as the lender with a copy. 

Remember, everyone on the mortgage (property title) needs to sign the completed form before submission as lenders will reject all wrongly completed form without considering what impact it may have on the borrowers.