Release Clause

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.