The discharge authority form
Every lender has its own discharge authority form, usually on its website or in internet banking. My bank-by-bank discharge guide covers 19 lenders. All borrowers on the loan sign it, and it tells the lender you're paying out the loan, why and who is handling settlement. When you refinance with me, I tell you exactly when to lodge it.
How long it takes
Lenders commonly need around two weeks' notice to prepare for a discharge, and some take longer at busy times. Lodge the form as soon as your new loan is approved, or as soon as your sale is unconditional.
The costs
- Discharge fee. Charged by your current lender, usually a few hundred dollars.
- Break costs. If you're on a fixed rate, breaking it early can cost a lot. Get the figure before you commit.
- Government fees. A small fee to register the discharge of the mortgage on your title.
- LMI. LMI you paid isn't refunded, and a new lender may charge it again if your new loan is over 80%.
Before settlement
- Move any money out of your offset account, or it'll be used to pay the loan
- Update direct debits and salary deposits if your accounts are closing
- Check whether you have redraw available that you'd rather keep
- Confirm the payout figure, including interest up to the settlement date
Questions people ask
What is a mortgage discharge?
Paying out your loan and having the lender's mortgage removed from your property's title, usually when you refinance or sell.
How long does a mortgage discharge take?
Lenders commonly need around two weeks' notice, sometimes longer, so lodge the form early.
How much does it cost to discharge a mortgage?
A discharge fee, usually a few hundred dollars, plus a government registration fee and any break costs on a fixed rate.
Where do I get a discharge authority form?
From your current lender, usually on its website or through internet banking.
