How to discharge a home loan

A discharge of mortgage is when you remove a home loan from the title of your property. When you have a home loan, the bank holds the Certificate of Title on your property until the home loan is repaid. When you’ve paid the full amount off your home loan, you need to go through a process to discharge the mortgage and remove the lender from your title.

You also discharge a mortgage when you sell your house or refinance your home loan. As a refinancer, you are getting a new home loan and discharging the old one.

When do you have to discharge a mortgage?

Home loans are a long-term proposition, and when you take one out it’s doubtful you’re already thinking about the logistics of discharging it. However, there are a variety of circumstances that might require you to discharge a home loan, and not all of them fall at the end of the loan term.

1.) If you’re repaying your mortgage in full

Once you’ve paid off your entire home loan, you’ll have to go through the formal process discharging the mortgage. This includes if you have a split home loan and are paying off one part of it.

2.) If you’re selling your home

When you’re selling your home, an existing mortgage will be listed on your title as an encumbrance. That means it has to be discharged before any settlement can occur. If you’re selling your home but want to keep your home loan for your next property, you can apply for what’s known as a substitution of security. This removes the mortgage from the title of the property you’re selling, and adds it to the property you’re purchasing.

3.) If you’re refinancing with a different lender

When you refinance, you’re discharging a mortgage one home loan facility in order to open another, or with one lender in order to open a new home loan with a different lender. This will require a formal discharge of mortgage.

How do I discharge a mortgage?

Discharging a mortgage is a fairly straightforward process:

1. Notify your lender

Notify your lender to discuss your plans to discharge your mortgage. Your lender will then ask you to complete a Discharge Authority form. Most lenders either have the form on their site, or have an online portal for requesting the form.

2. Complete and return the Discharge Authority form

Next, complete the form and return it to your lender. If you’re selling your property, ensure you complete the form in a timely manner. It will take the lender at least 10 business days to process your request. You might want to think about completing the form in person at a branch so your lender can help you through the process.

3. Register your discharge and Certificate of Title

If you’ve repaid your home loan, the lender can either register your Discharge of Mortgage at the Land Titles office on your behalf, or they can send you both the Discharge of Mortgage and Certificate of Title to register at the Land Titles office.

Should you decide to register the Discharge of Mortgage yourself, you’ll need to know where to register and what fees are payable in your state or territory. You can find that information here:

What are the costs involved?

The costs involved will often depend on the circumstances under which you’re discharging your home loan. Depending on your situation, you may owe your lender discharge fees. It’s important to look closely at your home loan contract and communicate with your lender about what kinds of fees you could be facing.

If your home loan was a fixed rate and you’re paying it out early, you could owe break fees or penalty interest. For a look at some of the fees involved in breaking a fixed rate home loan, read our guide. Also, registering your Discharge of Mortgage and Certificate of Title can carry different fees depending on the state or territory in which you live. You can find links to the relevant fees for your state or territory in the list above.

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Name	Interest Rate p.a.	Comparison Rate p.a.	Fees	Amount Saved
Up Home Loan Variable Rate Principal & Interest10% min. equityOwner-occupierOffset account	Interest Rate 6.15%	Comparison Rate 6.15%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $41,112	Go to siteMore Info Compare
Unloan Variable Home Loan Principal & Interest20% min. equityOwner-occupierRefinance	Interest Rate 5.74%	Comparison Rate 5.65%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $88,435	Go to siteMore Info Compare
Tiimely Own Variable Rate Home Loan Finder AwardPrincipal & Interest10% min. equityOwner-occupier	Interest Rate 5.94%	Comparison Rate 5.95%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $65,466	Go to siteMore Info Compare
HSBC Home Value Loan Principal & Interest40% min. equityOwner-occupier	Interest Rate 5.99%	Comparison Rate 5.99%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $59,689	Go to siteMore Info Compare
loans.com.au Variable Home Loan Principal & Interest10% min. equityOwner-occupier	Interest Rate 6.04%	Comparison Rate 6.06%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $52,750	Go to siteMore Info Compare
Macquarie Bank Basic Home Loan Principal & Interest40% min. equityOwner-occupier	Interest Rate 6.24%	Comparison Rate 6.26%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $29,827	Go to siteMore Info Compare
G&C Mutual Bank Essential Worker Home Loan Principal & Interest5% min. equityOwner-occupierOffset account	Interest Rate 6.04%	Comparison Rate 6.07%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $53,899	Go to siteMore Info Compare
Mortgage House Chameleon Home Loan Principal & Interest50% min. equityOwner-occupierOffset account	Interest Rate 5.99%	Comparison Rate 6.03%	Fees Application: $600 Ongoing: $395 p.a.	Amount Saved $56,584	Go to siteMore Info Compare
Bendigo Bank Express Variable Home Loan Principal & Interest10% min. equityOwner-occupierOffset account	Interest Rate 5.97%	Comparison Rate 6.12%	Fees Application: $250 Ongoing: $10 per month	Amount Saved $61,248	Go to siteMore Info Compare
Newcastle Permanent Building Society Real Deal Home Loan Principal & Interest20% min. equityOwner-occupierOffset account	Interest Rate 6.04%	Comparison Rate 6.08%	Fees Application: $595 Ongoing: $0 p.a.	Amount Saved $52,609	Go to siteMore Info Compare	$2,000 refinance cashback offer Eligible refinancers who apply online and borrow $250K+ (LVR 80% or lower) can get a $2,000 cashback. Terms and conditions apply.
Homestar Star Gold Principal & Interest30% min. equityOwner-occupierOffset account	Interest Rate 5.98%	Comparison Rate 5.98%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $60,846	Go to siteMore Info Compare
HSBC Home Value Loan Principal & Interest30% min. equityOwner-occupier	Interest Rate 6.04%	Comparison Rate 6.04%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $53,574	Go to siteMore Info Compare
Unloan Variable Home Loan Principal & Interest20% min. equityInvestmentRefinance	Interest Rate 6.04%	Comparison Rate 5.95%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $53,899	Go to siteMore Info Compare
loans.com.au SMSF Principal & Interest20% min. equityInvestment	Interest Rate 7.49%	Comparison Rate 7.50%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $-120,208	Go to siteMore Info Compare
Macquarie Bank Offset Home Loan Package Finder AwardPrincipal & Interest40% min. equityOwner-occupierOffset account	Interest Rate 6.24%	Comparison Rate 6.49%	Fees Application: $0 Ongoing: $248 p.a.	Amount Saved $29,579	Go to siteMore Info Compare
Newcastle Permanent Building Society Premium Plus Package Fixed Rate Principal & Interest 2Y Fixed20% min. equityOwner-occupier	Interest Rate 5.99%	Comparison Rate 7.76%	Fees Application: $0 Ongoing: $395 p.a.	Amount Saved $59,294	Go to siteMore Info Compare
Macquarie Bank Offset Home Loan Package Finder AwardPrincipal & Interest20% min. equityOwner-occupierOffset account	Interest Rate 6.30%	Comparison Rate 6.55%	Fees Application: $0 Ongoing: $248 p.a.	Amount Saved $22,544	Go to siteMore Info Compare
G&C Mutual Bank First Home Buyer Principal & Interest5% min. equityOwner-occupierOffset accountSpecial Offer	Interest Rate 6.19%	Comparison Rate 6.22%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $36,447	Go to siteMore Info Compare
Up Home Loan Fixed Rate Principal & Interest 5Y Fixed10% min. equityOwner-occupierOffset account	Interest Rate 6.45%	Comparison Rate 6.28%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $5,913	Go to siteMore Info Compare
Macquarie Bank Basic Home Loan Principal & Interest20% min. equityOwner-occupier	Interest Rate 6.30%	Comparison Rate 6.32%	Fees Application: $0 Ongoing: $0 p.a.	Amount Saved $22,792	Go to siteMore Info Compare

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