Discharging a mortgage

From: Financial Consumer Agency of Canada

What is a mortgage discharge

A mortgage is a loan secured by property, such as a home. When you take out a mortgage, the lender registers an interest in, or a charge on, your property. This means the lender has a legal right to take your property. They can take your property if you don’t respect the terms and conditions of your mortgage contract. This includes paying on time and maintaining your home.

When you pay off your mortgage and meet the terms and conditions of your mortgage contract, the lender doesn’t automatically give up the rights to your property. There are steps you need to take. This process is called discharging a mortgage.

What to expect when discharging your mortgage

A mortgage discharge is a process involving you, your lender and your provincial or territorial land title registry office.

This process varies depending on your province or territory. In most cases, you work with a lawyer, a notary or a commissioner of oaths. Some provinces and territories allow you to do the work yourself. Keep in mind that even if you do the work yourself, you may have to get documents notarized by a professional such as a lawyer or a notary.

For more information, contact your provincial or territorial government.

Your lender’s role

Typically, your lender will provide a confirmation that you paid your mortgage in full. Most lenders don’t send this confirmation unless you make a request. Check if your lender has a formal process for this request.

Your land title registry office’s role

Land title registry offices are part of your provincial or territorial government. These offices register official property titles. They have processes to make changes to a property’s title.

You, your lawyer or your notary must provide your land registry office with all the required documents. Once it receives the documents, your land registry office removes the lender’s rights to your property. They update the title of your property to reflect this change.

When can you discharge your mortgage

There are a few occasions when you can discharge your mortgage.

Discharging after paying off your mortgage

You, your lawyer or your notary can discharge your mortgage once you pay it off. You also need to make sure you don’t have any amount owing on any related products. For example, you may have a home equity line of credit (HELOC) with your mortgage. If that’s the case, you need to pay it off and close it before getting a mortgage discharge.

You may not want to discharge your mortgage if you plan on using your home as security for a loan or line of credit with the same lender. This includes options such as HELOCs.

Learn more about HELOCs.

Discharging when changing lenders

You may choose to renegotiate your mortgage contract and change lenders because another lender offers you a better deal.

When you change lenders, the information on your property’s title must be updated. You, your lawyer or your notary must discharge the mortgage and add your new lender to your property’s title. Some lenders charge other fees, including assignment fees when you switch to another lender. Ask your new lender if they will cover the costs of a mortgage discharge.

Find out more about changing mortgage lenders.

Discharging before selling your property

You must get a mortgage discharge when you sell your property. You, your lawyer or your notary must complete all the steps in the discharge process of your provincial or territorial land registry’s office. Once the discharge is complete, the lender’s rights are removed from the property.

Learn more about selling a home.

How much discharging a mortgage can cost

When you discharge your mortgage, you may have to pay fees.

Mortgage discharge fees

When you request a mortgage discharge, your lender may charge you fees. Some provinces and territories regulate the maximum amount a lender can charge for a mortgage discharge. The amount you have to pay depends on your lender and on the provincial or territorial legislation.

In cases where there is no regulation of the mortgage discharge fee, the lender can set its own fee. This typically ranges from no charge, up to $400. For more information on mortgage discharge fees, check the terms and conditions of your mortgage contract.

Federally regulated lenders, such as banks, must disclose the mortgage discharge fee in your mortgage contract. If this fee isn’t in your mortgage contract, contact FCAC to file a complaint.

Professional fees

You may have to pay fees when you work with a professional to discharge your mortgage. This can include a lawyer, a notary and/or a commissioner of oaths. These fees are typically between $400 and $2,500.

Penalty fees

If you pay off your mortgage before the end of your term, you may have to pay a penalty.

Find out more about mortgage penalties.

Where to get more information

For information on your province or territory’s mortgage discharge process, visit its land registry, land title or government website.  

How to make a complaint about your mortgage

If you have a complaint related to your mortgage, contact your lender.

All federally regulated financial institutions must have a complaint-handling process in place. 

File a complaint with your financial institution.

If your lender is provincially or territorially regulated, contact the appropriate provincial or territorial regulator.

Find the contact information for you provincial or territorial regulator.

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