How to discharge a mortgage?

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Forums › Finance and wealth management › How to discharge a mortgage?

floydbloke

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#284405 20-Apr-2021 09:26

I'm getting fed up with the continual decline in customer service of our current bank. We're considering changing and cutting all ties with them.

We still have a (revolving credit) mortgage account with that bank, it has a positive balance (so we don't owe them any money but the bank still holds title over the property). To completely disengage we need to discharge the mortgage.

Please can anyone offer some guidance how to go about this. E.g. start with the lawyer or start with the bank. Any any idea of the costs involved. I guess a lawyer will want to be paid for their services, and banks being banks I expect they'll probably charge for this as well

Sometimes I use big words I don't always fully understand in an effort to make myself sound more photosynthesis.

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#2695171 20-Apr-2021 09:34

Can I ask which bank you are not satisfied with? I would've thought that banks and mortgages are companies you only would deal with say once a year when you refix and then no need to speak to them the rest of the times.

I would also suggest you getting a mortgage broker that deals with multiple banks. My broker is great and they do not charge.

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antoniosk

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#2695178 20-Apr-2021 09:49

Revolving credit is also known as an overdraft :-)

Just talk to your bank and tell them you would like to cancel the facility, if theres nothing its not a problem.

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floydbloke

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#2695179 20-Apr-2021 09:51

turtleattacks:

Can I ask which bank you are not satisfied with? I would've thought that banks and mortgages are companies you only would deal with say once a year when you refix and then no need to speak to them the rest of the times.

BNZ, been with them about 30 years and they were fantastic for a long time, just a few things annoying me in the last few years so now considering our options:

Excessive telephone wait times (20 minutes +)
No more Airpoints on their credit cards
Not responding to 'secure messages'
Taxing us the wrong rate, despite having our IRD numbers - then subsequently strenuously denying that they could have done better when we grizzled about it
Son is off to Oz in a week or so, was looking to grab a couple of hundy cash for him. They have stopped dealing in foreign cash.

(There are other things that they do do well. I really like their Android app and Internet banking site)

Not sure if any of the other big guys are any better, all comments welcome. Outfits like TSB or Heartland are looking quite appealing.

turtleattacks:
I would also suggest you getting a mortgage broker that deals with multiple banks. My broker is great and they do not charge.

Sorry if I wasn't clear in my OP. I don't need a mortgage, so I don't need a mortgage broker.

Sometimes I use big words I don't always fully understand in an effort to make myself sound more photosynthesis.

floydbloke

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#2695181 20-Apr-2021 09:54

antoniosk:

Revolving credit is also known as an overdraft :-)

Just talk to your bank and tell them you would like to cancel the facility, if theres nothing its not a problem.

I'm considering cutting all ties with them, so the mortgage would need to be discharged. That is what my question is, how to go about this and what it might cost, to determine if it's worth it just to satisfy my grumpy middle-aged man principle.

Edit: Apologies for lack of clarity. I've updated my OP content to match the topic title.

Sometimes I use big words I don't always fully understand in an effort to make myself sound more photosynthesis.

Bung

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#2695184 20-Apr-2021 10:07

I ditched the ANZ after repaying their mortgage. It was only discharged about 20yrs later when house sold. Unless you want to use the house as security again just switching banks doesn't require it.

KrazyKid

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#2695186 20-Apr-2021 10:11

Seems to be a bank thing at the moment - upset customers :)
Westpac has given be some low level grumbles in the past year, and now that my loan needs re-fixing, the would not match kiwibank.
So I'm off to Kiwibank.

I am about to call them to find out what the discharge fees are to move my floating loans.

I expecting bad news - they seem to love new fees at the moment. (one of my low level grumbles).

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Beccara

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#2695190 20-Apr-2021 10:44

Sounds about right for BNZ, I've had a mortgage pre-approval in since Jan that's only just done, nothing complex about it 2 salaried people 1 dependent but just takes forever with them. Spoke with a couple of brokers who have said the same thing about them

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BlinkyBill

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#2695192 20-Apr-2021 10:49

To answer your question, ring them up, wait the 20 minutes until they answer, and tell them to discharge the mortgage.

eracode

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#2695199 20-Apr-2021 11:08

BlinkyBill:

To answer your question, ring them up, wait the 20 minutes until they answer, and tell them to discharge the mortgage.

... and ask them how much is the discharge fee.

Sometimes I just sit and think. Other times I just sit.

frankv

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#2695201 20-Apr-2021 11:11

antoniosk:

Revolving credit is also known as an overdraft :-)

It's an overdraft, but at mortgage interest rates. And with your house as security. So likely more complex to discharge than an ordinary overdraft.

eracode

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#2695206 20-Apr-2021 11:20

frankv:

antoniosk:

Revolving credit is also known as an overdraft :-)

It's an overdraft, but at mortgage interest rates. And with your house as security. So likely more complex to discharge than an ordinary overdraft.

Not more complex to discharge. The mortgage is simply the security for the loan facility. The credit facility is recorded by way of a Loan Agreement - a separate document which refers to the mortgage. When the mortgage is discharged, the credit facility lapses because there's no longer any security supporting it - the bank will cancel the facility limit.

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Fred99

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#2695211 20-Apr-2021 11:33

You do need to see a lawyer. IIRC cost from them to do the paperwork was about $120 (this 10 years ago), there was also a small admin fee from the bank ($80 - ANZ). I queried that with the lawyer, was assured that it was normal.

We discharged our mortgage to get the bank out the loop when dealing with insurance claims for EQ repairs, as despite having been "paid off", the mortgage is still registered on the title, payments from insurers etc had to be made to the mortgager, withdrawals from the account "approved" by the bank. Unusual circumstances - if it hadn't been for that, we'd have probably just left the revolving credit mortgage in place - there are few downsides and at the moment keeping some cash reserve on hand "for a rainy day" ends up costing you money, inflation adjusted, but the cost of the revolving credit facility is more or less free.

robjg63

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#2695223 20-Apr-2021 12:00

Seem to recall it cost ~$200.

You need to contact a lawyer - and you should be able to just phone and get a quote on the costs.

It is an electronic transaction - so they just complete that and tell you when its done.

You are wise to remove the banks hands from your property if it is no longer required.

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traderstu

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#2695284 20-Apr-2021 14:07

From the BNZ website:

If you value a bank with a tidy online banking setup, don't go near Heartland, it's a cluster.

mattwnz

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#2695365 20-Apr-2021 16:36

If looking for a new bank, TSB have good customer service and don't usually have any hold times. I have been with them since the 90's, although also have accounts with most banks. Plus NZ owned with NZ based staff, which is becoming more and more rare when dealing with supposed NZ companies.

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