How to Discharge Your Mortgage After Paying It Off in Canada

Paying off a mortgage and discharging it are two different steps

Making your final mortgage payment clears the debt, but it does not automatically remove the lender's registered interest from the title to your property.

When a mortgage is created, the lender registers an interest in, or charge on, the property. After the mortgage is paid and the contract conditions are satisfied, that registered interest still has to be formally removed. The Financial Consumer Agency of Canada calls this process discharging a mortgage.

A discharge involves three parties: you, your lender and the provincial or territorial land title registry office. Property registration is administered by provinces and territories, so there is no single Canada-wide discharge form or national land-registry filing procedure.

When can you discharge a paid-off mortgage?

You, your lawyer or your notary can arrange the discharge once the mortgage has been paid off and its contractual requirements have been satisfied.

Before starting, check whether another credit product is secured by the same registration. The federal consumer agency specifically warns about a home equity line of credit (HELOC) connected with the mortgage. If such a HELOC must be removed with the mortgage, it needs to be paid off and closed before the discharge can proceed.

You may intentionally decide not to discharge a charge immediately if you plan to continue using the property as security for a loan or line of credit with the same lender. Discuss the consequences with the lender before requesting removal.

Ask your lender for proof the mortgage is paid in full

Your first practical step after the final payment is to contact the lender and request confirmation that the mortgage has been paid in full.

The Financial Consumer Agency of Canada says that most lenders do not send this confirmation unless you request it. Ask whether your lender has a specific discharge request process and whether it requires any additional instructions from you.

Also ask the lender to confirm:

• whether the mortgage balance, accrued interest and other amounts are fully cleared;
• whether another secured product must be closed;
• what discharge documents the lender will prepare or sign;
• what mortgage discharge fee applies; and
• whether a lawyer or notary must coordinate with the lender.

Register the discharge with your province or territory

The formal removal happens through the land title or land registry system in the province or territory where the property is located.

You, your lawyer or your notary provide the documents required by that registry. Once the registry accepts and registers the discharge, it updates the property title to remove the lender's rights associated with that mortgage charge.

The exact forms, registration charges, electronic-filing rules and who is permitted to submit the documents vary by province or territory. Because of those differences, there is no single national online mortgage-discharge application that applies to every Canadian homeowner.

Do you need a lawyer or notary to discharge a mortgage?

It depends on the province or territory. The Financial Consumer Agency of Canada states that in most cases you work with a lawyer, notary or commissioner of oaths.

Some jurisdictions allow homeowners to perform the work themselves. Even where self-filing is permitted, however, the required documents may still need to be notarized or otherwise completed with a qualified professional.

Before paying for professional services, check the official land-registry requirements for the property's province or territory and ask your lender whether it has its own professional-document requirements.

How much does a mortgage discharge cost?

There is no single nationwide mortgage-discharge price. Your total can include a lender fee, professional fees and charges imposed by the provincial or territorial registration system.

Lender discharge fee

A lender may charge a fee when you request the discharge. Some provinces and territories regulate the maximum amount a lender may charge.

Where there is no regulated maximum, the Financial Consumer Agency of Canada says the lender-set discharge fee typically ranges from no charge to $400.

If your lender is federally regulated, such as a bank, it must disclose the existence and amount of the mortgage discharge fee in the mortgage disclosure information provided under federal requirements. Check your mortgage contract and obtain the current amount from your lender.

Lawyer, notary or commissioner fees

If professional assistance is required, FCAC states that these fees are typically between $400 and $2,500. The amount depends on the professional and the work required.

Prepayment penalty if you pay the mortgage off early

A mortgage discharge fee is different from a prepayment penalty. If you pay the entire mortgage before the end of its term, your lender may charge a prepayment penalty depending on the mortgage contract.

An open mortgage generally permits repayment without a prepayment penalty. For other mortgages, the penalty and calculation depend on the lender and contract. Federally regulated lenders must provide prescribed information about prepayment privileges and charges.

If you are approaching renewal rather than simply reaching the end of your mortgage, compare your options before paying out or switching lenders. Helpydo's guide to renewing your mortgage or switching lenders in Canada covers that separate decision.

Step-by-step: remove the paid mortgage from your title

1. Confirm the payout is complete. Ask the lender whether any principal, interest or other amount remains outstanding.
2. Check connected secured credit. Find out whether a HELOC or another product is tied to the same property charge and whether it needs to be paid and closed.
3. Request the lender's confirmation. Ask for confirmation that the mortgage is fully paid and for the lender's discharge instructions.
4. Check your provincial or territorial process. Identify the applicable land title registry requirements for the property.
5. Arrange professional assistance where required. Use a lawyer, notary or commissioner of oaths if the jurisdiction, lender or documents require one.
6. Submit the discharge documents. Provide the required documents to the land registry and pay applicable fees.
7. Verify the registration. After completion, confirm that the lender's registered interest has actually been removed from the property title.

Do not stop at the final mortgage payment

A zero mortgage balance and a clean property title are not the same thing. The purpose of the discharge process is to make the public property record reflect that the lender no longer has the mortgage rights registered against the property.

Once the land registry has processed the required documents, verify that the title reflects the removal. This is particularly important before a later sale or other transaction involving the property.

What changes if you are selling or switching lenders?

If you are selling the property

A mortgage discharge is required when the property is sold so that the lender's rights can be removed from the property through the applicable provincial or territorial registration process.

If you are changing mortgage lenders

When you move the mortgage to a different lender, the property title must be updated. The existing mortgage is discharged and the new lender's interest is registered. Some lenders may also charge assignment or other fees, while a new lender may sometimes agree to cover certain switching or discharge costs.

Common mortgage discharge mistakes

• Assuming the mortgage disappears from title after the last payment. The registered charge still needs to be discharged.
• Not requesting confirmation from the lender. Most lenders do not automatically send confirmation that the mortgage has been fully paid.
• Forgetting about a linked HELOC. A related secured line of credit may have to be paid off and closed before the mortgage charge can be discharged.
• Assuming every province uses the same process. Land-title registration rules are provincial or territorial.
• Confusing the lender discharge fee with a prepayment penalty. They are separate charges and may arise for different reasons.
• Skipping the final title check. Confirm that the land registry has actually removed the lender's registered interest.