What must lenders do upon full repayment of a mortgage?

When a mortgage is fully repaid, the lender is required to discharge the mortgage, which involves formally removing the mortgage from the property title. This discharge is a crucial step in the loan process, signifying that the borrower has fulfilled their obligations under the loan agreement and that the lender no longer has a claim against the property.

This action serves to clear the borrower’s title, allowing them full ownership without any encumbrances from the mortgage. It is documented through specific legal procedures that ensure the property's title reflects the absence of the mortgage. Properly discharging the mortgage protects the borrower’s interests and provides clarity regarding property ownership.

In contrast, renewing the loan or adjusting the interest rate typically occurs within the context of ongoing loan arrangements, not upon repayment. Changing the ownership title is unrelated to the mortgage itself unless the mortgage is discharged, which often leads to changes in ownership documents. Thus, discharging the mortgage is the necessary and appropriate step taken by lenders following full repayment.