How Do I Discharge My Mortgage?

Find out the steps required to discharge your mortgage with Savvy today.

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, updated on August 8th, 2023       

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Discharging a mortgage can be the triumphant end of a long journey or the beginning of a new one.  Find out all you need to know about what’s involved in discharging a mortgage with Savvy, the home loan comparison specialists.

What is involved in discharging a mortgage?

When you take out a home loan, your lender will hold the Certificate of Title to your property.  Discharging a mortgage means paying back the lender in full and ending your loan agreement and subsequently removing the mortgage encumbrance from the title to your property. 

Paying off your home loan in full does not automatically discharge the mortgage on it, though.  This is another separate step that either you or your lender will need to complete before you can receive the Certificate of Title to your property.

When is it necessary to discharge a mortgage?

Some of the circumstances where you’ll need to discharge the mortgage on your home include the following:

  • If you’ve repaid your home loan and want your lender to remove the mortgage on your property Certificate of Title
  • If you’re selling your property – your mortgage will have to be discharged so there’s no encumbrance on the title when it’s transferred to the new owners
  • If you’re refinancing your home loan from one lender to another – you'll need to discharge your existing mortgage before registering another

What are the costs involved in discharging a mortgage?

Mortgage Discharge fees are charged by each state government to remove the encumbrance on a property’s Certificate of Title.  The cost of discharging a mortgage varies from state to state, but generally the mortgage discharge fee is around $110 to $200.  For example, the fee in South Australia is $176, in the Northern Territory it’s $149 and in Queensland it’s $195 (figures current as of January 2022).

Lenders, including banks, may also charge fees for ending a home loan agreement.  These are called discharge, settlement or termination fees.  These are standard fees which are charged to cover the cost of the administration involved in ending your loan contract.  Generally, lenders charge anywhere from $150 to $400 in settlement or termination fees, with $350 being a common charge for this service. 

These fees shouldn’t be confused with early exit fees, also known as break fees, which are charged when a borrower breaks a fixed term loan early. The cost of this charge will vary depending on the size of your loan and the amount of time left to run at the point of breaking the agreement, but can add up to hundreds, if not thousands, of dollars.

Steps to discharge your mortgage

More of your frequently asked questions about mortgage discharge

What is an incumbrance on a Certificate of Title?

An incumbrance on a property is a restriction on the property, or the use of the land, for example a mortgage, caveat, easement, lease, encroachment or lien.

Do I have to employ a conveyancer to discharge my mortgage?

You aren’t obligated to employ a conveyancer or lawyer to discharge a mortgage, as it’s quite a simple process to complete yourself.  However, when you’re selling a property, your conveyancer will deal with all aspects of discharging your mortgage or transferring it to another property (called porting your loan).

What does partial discharge of mortgage mean?

A partial discharge of mortgage means discharging one mortgage on a property that may have two or more mortgages attached to it.  For example, you may have used your home as security when you first bought the property and subsequently used your loan equity to finance an investment property.  If you then decide to sell your investment property, you may complete a partial discharge of your mortgage, because you’re only getting rid of one portion of the mortgage.

How long does it take to discharge a mortgage?

It can take between 14 and 21 days to fully discharge a mortgage, so allow yourself plenty of time for the process to take place. However, the time it takes for these processes to be completed can vary depending on your situation, so you may find that yours is completed in a shorter (or longer) time.

Does removing a guarantor involve discharging a mortgage?

Yes – if you wish to remove a guarantor, you will have to refinance your mortgage and take out a new one.  If you have built up equity in your home before wishing to remove a guarantor, this can be done quickly and easily.  However, if you have very little equity and are still below the 20% required as a deposit, you may have to pay Lenders Mortgage Insurance.

Do I have to discharge my mortgage every time I refinance?

Yes – refinancing involves discharging one mortgage and opening up another, so each time you switch lenders or refinance, you will have to discharge your former mortgage.

Would it be better to keep my mortgage open?

If you are selling one house and buying another, it may be in your best interests to keep your existing mortgage open and transfer it to your new home.  This is called porting a loan.  Most home loans are portable, although you should check with your lender if you think this could be a good option for you.

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