What is a Partial Discharge, and What Should I Look Out For?

A partial discharge is when you have more than one property secured by the same home loan, and you want to release one of those properties as security without repaying the entire loan amount. These may take longer than traditional discharges because your Lender may need a valuation done on the remaining properties. In addition, your Lender may charge you discharge fees. You may also be charged break fees or penalty interest if your mortgage was fixed rate. 

What is the Process for a Partial Discharge When the Original LVR is Maintained?

When you partially discharge your mortgage, you need to do the following:

1. Let your Lender know your plans. 
2. Complete and return the Discharge Authority form.
3. Register your discharge and certificate of title

A partial discharge is a straightforward process, especially when the original LVR is maintained. 

What is the Process for a Partial Discharge When the Original LVR has Increased?

If your LVR has increased after a partial discharge, the process will be very similar. You need to notify your Lender and complete the discharge form. However, you may have to refinance your home loan to account for the increase in LVR. You may also have to pay Lender’s mortgage insurance. If your LVR has increased and you do need to refinance, you may have to pay additional fees, such as break costs. 

If you own two or more properties on the same home loan and are interested in a partial discharge, you should consult with the experts at Mortgage House. We can help walk you through the process and help you determine if it is the best solution for your situation. If needed, we can even help you refinance your loan.