In our previous post, we mentioned how to cancel the mortgage loan with the bank. However, bear in mind that the economic cancellation of the mortgage is different from the cancellation of the mortgage at the Land Registry. That is to say, the mortgage may already be fully paid off but still be registered in the Land Register.
This is because when obtaining a mortgage loan at the bank, there are two subject matters in that contract: the loan and the mortgage. They are not the same:
The loan is a personal obligation between the bank and the debtor, while the mortgage is a right of guarantee on a property to ensure the fulfillment to repay the loan.
Below we explain the steps to you should take to cancel the mortgage at the Land Registry:
- First of all, you should ask the bank to issue a “certificate of discharge”. This certificate shall state that the mortgage is fully paid free of charges.
- Secondly, you need to take the certificate of discharge to a notary public. Afterwards, you shall request that the bank’s legal representative is present so that they issue the deed of mortgage redemption.
- Thirdly, you should submit the stamp duty tax form at the regional tax office. This step is compulsory and exempt from payment.
- Finally, you should take the copy of the tax form, the notification of discharge and the deed to the Land Registry to remove the mortgage. Registration fees depend on the mortgage value.
Please note that it is not compulsory to cancel your mortgage at the Land registry. However, we recommend it if you want to sell the property or apply for another loan. It is also something to keep in mind if you are buying a property and the seller has a mortgage. Make sure that after the purchase, he will cancel the mortgage at the Land Registry.
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