Quick answer
A discharge of mortgage is the registered document that removes a mortgage from a property's title once the debt it secures has been repaid. The borrower requests a payout figure, signs the lender's discharge authority, and the lender releases its security, usually through an electronic settlement where the payout and the discharge happen together. Queensland calls the same step a release of mortgage.
Key points
- Start with a payout figure for a specific date, not a balance from your last statement
- Most discharges are lodged electronically at settlement, at the same moment the lender is paid
- A partial discharge can release one property from a multi-property loan
- Caveat loans end with a withdrawal of caveat rather than a discharge
- Starts with
- A dated payout figure
- Usually lodged
- Electronically at settlement
- Caveat loans
- Withdrawal of caveat instead
Repaying a secured loan doesn’t clear the title on its own. The mortgage stays on the register until a discharge of mortgage is lodged and registered. Until then, the property can’t be sold cleanly or offered as first-ranking security to a new lender.
How does a discharge of mortgage work, step by step?
- Request a payout figure. Ask the lender for the amount needed to clear the loan on a specific date. It covers principal, interest to that date and any costs your loan documents allow.
- Sign the discharge authority. This is the lender’s form telling it to prepare the discharge and confirming the date and source of funds.
- Book settlement. For a sale or refinance, the parties’ representatives set up an electronic workspace. PEXA describes how its financial settlement schedule records every incoming and outgoing payment, and each participant approves it before settlement goes ahead.
- Settle and lodge. At settlement, the lender receives its payout and the discharge is lodged with the land registry electronically in the same transaction.
- Check the title. A fresh title search afterwards should show the mortgage gone.
What forms and rules apply in each state?
The idea is the same everywhere, but the names and mechanics vary a little.
| Situation | How it’s handled | Source |
|---|---|---|
| Queensland paper release | Form 3 Release signed by the mortgagee; correctly prepared dealings usually registered within three to five working days | Titles Queensland |
| Western Australia, stand-alone discharge | Eligible discharges must be lodged electronically since 1 December 2018 | Landgate MTG-04 |
| Western Australia, several lenders on one mortgage | All mortgagees must join in and sign | Landgate MTG-04 |
| Payout at a sale or refinance | Discharge lodged electronically at settlement | PEXA |
| Caveat loan repaid | Caveat removed by a Withdrawal of Caveat | NSW Registrar General |
Landgate’s guide also confirms a discharge can be partial: either partial as to money over the whole land, or partial as to land from the whole of the money, but not both at once. In practice, that’s how one property is released from a loan secured on two.
That matters if you’ve used more than one property as security. Selling one of them doesn’t have to mean repaying everything: the lender can release that title for an agreed payment, provided the property left behind still supports what remains owing. Agree the release amount early so the sale contract isn’t held up.
Why does the discharge matter to a borrower?
Mostly because of timing. If you’re selling to repay a private loan, the buyer’s settlement depends on your lender being ready to discharge. If you’re refinancing to a bank, the bank won’t settle until the private mortgage comes off in the same transaction.
Three things keep it smooth:
- Request the payout figure early. Interest keeps running, especially on a capitalised loan, so the figure is tied to a date. A short delay means a fresh figure.
- Return the discharge authority promptly. Lenders often won’t book settlement without it.
- Know what’s in the number. Interest to the payout date, any capitalised interest, discharge costs and, if the loan has passed its term, any default interest.
For a full walk-through, read paying out a second mortgage early and what happens at settlement.
Illustrative example
Illustrative example: a Toowoomba transport operator has a $400k private first mortgage over a depot, with interest capitalised. The depot sells and settles in eight weeks. Two weeks out, the operator’s solicitor requests a payout figure for the settlement date, which comes to around $430k once capitalised interest and discharge costs are added. The operator signs the discharge authority the same day. At electronic settlement the lender is paid from the sale proceeds, the discharge is lodged in the same workspace, and the balance flows to the operator.
Which related terms should I know?
- Registered mortgage: the security a discharge removes.
- Exit strategy: the event that funds the payout.
- How to remove a caveat: the equivalent step for a caveat loan.
- Pay out an expiring private loan: when another lender’s loan is due and you need to refinance.
Browse every term in the glossary, or if an existing lender’s payout date is bearing down, tell us about the loan.
Need to clear a lender before its deadline?
If you’re refinancing out of another lender, we’ll need the property details, the current payout figure if you have one and the date it’s due. Enquiring doesn’t trigger a credit check, your details stay with one direct lender, and a real specialist looks at every enquiry. The more accurate your answers about what’s owing, the quicker you’ll know whether a new loan can pay the old one out on time. Find out if you qualify.
Frequently asked questions
How long does a discharge of mortgage take?
When the payout happens through an electronic settlement, the discharge is lodged at the same moment the lender is paid. Paper dealings take longer: Titles Queensland says correctly prepared dealings are usually registered within three to five working days of lodgement.
What is a discharge authority?
It's the lender's own form, signed by the borrower, instructing it to prepare the discharge and confirming where the payout will come from and when. Lenders often won't book a settlement until they have it, so sign and return it as soon as you've set a date.
Can I remove one property from a loan secured on two?
Often, through a partial discharge. Landgate's guidance allows a discharge that is partial as to land, releasing an identified property from the whole debt. The lender will usually want a payment that keeps the remaining security comfortable.
Do I need a solicitor to discharge a private mortgage?
For a payout at a sale or refinance, the solicitors or conveyancers on the settlement handle it. In Western Australia, eligible stand-alone discharges must be lodged electronically, which needs a subscriber to an electronic lodgement network, so most borrowers use a professional.
Why is my payout figure higher than my loan amount?
It includes interest to the payout date, any capitalised interest, and costs set out in your loan documents, such as discharge fees. If the loan ran past its term, any default charges will appear too.