DEFINITION of 'Release Clause'

A release clause is a mortgage term that refers to a provision within a mortgage. The release clause allows for the freeing of part of a property from the mortgage after a proportional amount of the mortgage has been paid.

BREAKING DOWN 'Release Clause'

A release clause gives the owner the privilege of paying off a portion of the mortgage debt in order to free a portion of the property from the mortgage. A release clause enables a property owner to own free and clear a portion of the mortgaged property. This would allow the owner to sell off part of the property, as with a developer who wishes to subdivide the land that is financed with a mortgage.

RELATED TERMS
  1. Alienation Clause

    A clause in a mortgage contract that requires full payment of ...
  2. Assumption Clause

    A provision in a mortgage contract that allows the seller of ...
  3. Due-On-Sale Clause

    A provision in a mortgage contract that requires the mortgage ...
  4. Defeasance Clause

    A mortgage provision indicating that the borrower will be given ...
  5. Second Mortgage

    A type of subordinate mortgage made while an original mortgage ...
  6. Power Of Sale

    A clause written into a mortgage authorizing the mortgagee (lender) ...
Related Articles
  1. Personal Finance

    Shopping for a Mortgage in 2017? Use This Tool First

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2017 can all be done online.
  2. Personal Finance

    Shopping for a Mortgage? Use This Tool First

    As home-buying technology has progressed, the process of finding the best mortgage rates for 2016 can all be done online.
  3. Personal Finance

    Behind the Scenes of Your Mortgage

    Four major players slice and dice your mortgage in the secondary market.
  4. Financial Advisor

    Reverse Mortgages: Right for Clients? Not Often

    Reverse mortgages are a legitimate vehicle for folks age 62 and up to tap into the equity in their homes for other uses. Here's what to consider with them.
  5. Retirement

    Additional Streams of Income for Seniors

    Find out how a reverse mortgage can work in your favor during retirement.
  6. Insights

    How Interest Rates Affect the Housing Market

    Understand how rate changes can affect home prices and learn how you can keep up.
  7. Personal Finance

    5 Things You Shouldn't Tell Your Mortgage Broker

    Applying for a mortgage can be a strenuous process. Here are five things to avoid doing when meeting with your mortgage broker.
  8. Personal Finance

    Comparing Reverse Mortgages vs. Forward Mortgages

    Which one a homeowner chooses depends on where you are at this point in your life, personally and financially.
  9. Personal Finance

    Understanding the Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  10. Personal Finance

    7 Mortgage Trends To Expect In 2011

    How will the year compare to 2010? What's likely to be different?
RELATED FAQS
  1. If my mortgage lender goes bankrupt, do I still have to pay my mortgage?

    Yes, if your mortgage lender goes bankrupt you do still need to pay your mortgage obligation. Sorry to disappoint, but there ... Read Answer >>
Trading Center