Buyouts, renegotiation, bridging loans · Guide
Release of mortgage: when it is required, what it costs, and when to avoid it
A registration lapses after the final instalment: the three cases where a release is required, the two where no deed is needed, and its real cost.
A release of mortgage is only required if a third party demands a clear mortgage status: a purchaser during a sale, or a new lender during a refinancing. If the loan reaches its term, or if it is settled without a sale or refinancing, the registration lapses automatically on its ultimate effective date. Its cost is not calculated as a percentage of the capital: it is the sum of a fee charged per bracket, formalities, taxes and disbursements.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- A release erases the mortgage registration, not the security: repaying the loan extinguishes the debt, but not the registration published on the property.
- A mortgage registration carries an ultimate effective date, recorded on the schedule, after which it ceases to have effect without any deed.
- A release is only required if a third party demands a clear mortgage status today: a purchaser, or a new lender in the case of a refinancing.
- It is not calculated as a percentage of the borrowed capital: it is added up, line by line, including fees, taxes and contributions.
- A loan refinancing involves two distinct deeds, the release of the old registration and the creation of a new one, each with its own cost.
You only pay for a mortgage discharge if a purchaser or a new lender requires a clean title. Otherwise, the registration lapses automatically. This is a key step for refinancing an existing loan, selling or buying out a share.
Mortgage discharge: what it cancels, and what it does not cancel
A notarised deed by which your bank consents to the cancellation of the registration taken on your property. Repaying the loan extinguishes the security, not the registration.
As long as the registration appears on the title, the property remains encumbered. The lender’s privilege follows the same logic.
The end date of the registration decides everything
Each registration carries an ultimate date of effect, after the last instalment. Once that day has passed, it produces no further effect, without any deed. Ask your solicitor for your date before paying anything.
When the mortgage discharge is due
- You sell before this date. The cost is deducted from the sale price.
- You refinance your loan. Cancelling the old registration and taking out a new one: two deeds, two invoices. See renegotiation and refinancing.
- You leave a co-ownership, and the secured loan is replaced. A fee on the partition is added.
- Taux de droit commun 2,50 %
- Taux après séparation de corps, divorce ou rupture de PACS 1,10 %
Deux régimes, et le second n'est pas le droit commun : le taux réduit est réservé aux partages des intérêts patrimoniaux consécutifs à une séparation de corps, un divorce ou une rupture de pacte civil de solidarité. Une rupture de concubinage n'est pas dans cette liste. L'assiette est l'actif net partagé, jamais la soulte seule.
- En vigueur depuis le
- Source
- Article 746 du code général des impôts — Légifrance
Equalisation payment and release of a borrower: the buy-out of an equalisation payment and the release from joint liability.
When you have nothing to pay
- The loan reaches its term: the registration is extinguished automatically.
- You redeem the loan early without selling: wait until a clean statement is requested, if it is ever requested. The cost of exit: early redemption.
What it costs, line by line
Not a percentage of the capital: five lines, five rules.
| Line | Who receives it | How it is calculated |
|---|---|---|
| Discharge deed fee | The notary | Fixed amount per tranche, based on the assessment base |
| Formality fees | The notary | Regulated rate, per formality carried out |
| Value added tax | The State | On the fees and charges |
| Real estate security contribution | The State | Due for the cancellation, with a minimum per deed |
| Disbursements | Third parties, advanced by the notary | At actual cost, on proof |
Les tarifs réglementés sont exprimés hors taxes. Un devis comparé à un décompte ne se lit donc pas sans vérifier si les deux parlent de la même base.
- En vigueur depuis le
- Source
- Article 278 du code général des impôts — Légifrance
C'est un plancher par formalité : la radiation d'une inscription en supporte un, quel que soit le capital garanti.
- En vigueur depuis le
- Source
- Article 881 M du code général des impôts — Légifrance
A buyback involves two deeds
Assise sur les sommes ou valeurs de la créance garantie énoncées au bordereau. Elle relève des frais de GARANTIE du nouveau prêt, pas des frais d'acquisition du bien : ne la comptez pas deux fois.
- En vigueur depuis le
- Source
- Légifrance
In any comparison, require the sum of the two deeds. Compare the guarantees: mortgage or charge.
Discharge and sale: two separate invoices
Montant hors taxes. Il concerne la MUTATION, c'est-à-dire la vente, et non l'acte de mainlevée. Il figure ici pour une seule raison : montrer que les deux actes se tarifent séparément, sur des assiettes différentes.
- En vigueur depuis le
- Source
- Article R. 444-9 du code de commerce — Légifrance
Ask the solicitor for a discharge breakdown separate from the sale breakdown.
Can it be paid for less?
Not the fee: the rate is regulated. However, you can avoid an unnecessary deed, and negotiate the “discharge management fees” of your bank, which are contractual.
Count all registrations before the sale
Request the complete land charge register and count the entries. A second registration discovered at the last minute causes the signing date to be lost.
The timeline of a sale
- The solicitor obtains the land charge register.
- They request a repayment statement from your bank.
- The bank gives its agreement in principle for the discharge.
- The solicitor withholds a provision from the price.
- The discharge is lodged.
- The solicitor finalises a final account.
The provision is calculated with a margin: request the balance in writing.
Also write to the solicitor before paying (is the discharge due?) and before signing (the itemised quote).
Considering a buyback? Create your file or have your guarantee line calculated by phone.
Sources
Read next
- Mortgage rates in Lyon: current rates by loan term
- Repaying your mortgage early: paying the compensation fairly Repaying early is a right. The compensation is due only if the contract provides it, capped at the lower of two calculations. The exempt cases.
- Separation or divorce with a mortgage running: who pays what, and what to tell the bank? Until the bank signs, you both remain liable for the whole loan. What to arrange as soon as you separate, and the order of the decisions after that.
- Buyout of the equalisation payment and release from joint liability: keeping the property and taking over the loan alone Equalisation payment, transfer duty, bank consent, deadlines: what you need to arrange to keep the property and take over the loan alone after a separation.
All articles on this topic: Buyouts, renegotiation, bridging loans