Glossary
Glossary of terms and acronyms related to Australian banking, finance and investments.
Mortgage Discharge
Mortgage discharge is a fee paid when a home loan is closed before the loan period ends. It serves as the borrower's penalty for breaking the loan terms, and is meant to cover the losses suffered by the lender. When you transfer your loan to another lender, your original lender loses revenue in the form of interest and ongoing fees. Mortgage discharge may be determined by the interest rate differential or the equivalent of two to three months' interest, whichever is greater. The rate or amount should be disclosed in the contract before the loan is granted.
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