What is a partial discharge?

A partial discharge happens when your loan is secured by multiple properties, and you ask to have one or more of those properties released without paying off the full debt.

When to consider a partial discharge and how does it impact your loan?

Customers may consider a partial discharge for a number of reasons that can relate to their property and financial portfolio. Some of the most common reasons include:

You are selling a property that’s linked to your loan

You are selling one property while retaining others under the same loan

You want to modify your loan without fully paying off the total balance

Property being sold will no longer serve as security on your loan

A loan reassessment or adjustments to your repayments

Possibly needing a lump sum payment or additional security if the remaining property value is insufficient

Let's look at an example...

Let’s say you have a loan for $800,000 and two properties securing that loan: Property A $400,000 and Property B $600,000.

You sell Property A and repay the $400,000 to the loan, the balance would be $400,000 (less discharge fees).
Property B would remain be sufficient and remain as security for the remaining loan.

However, if you did not repay the loan, the remaining security would not be sufficient security for the $800,000. In those circumstances, we would ask for additional security -that is, property replacing Property A.

What do we require to begin the process

Once a Discharge Request form is completed, we will work with you to confirm some important information including:

Reasons for the discharge

Which property or properties are being sold

The amount of your loan or loans being paid off

How do you get started?

To get started, complete the request to Partial Discharge form (also known as the Discharge form) form and send it through to discharges@redzed.com. Once received the team at RedZed will be in touch with the next steps.

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