How to deal with land charges after repayment of the loan

It usually takes many years for a property loan to be fully repaid. But as soon as this time comes, many homeowners ask themselves what to do with their land charges. On the one hand they would like to get rid of the land charge entries in the land register, on the other hand it could be that the land charge will be needed again one day.

However, there is in general answer to this question. How a property owner decides best depends entirely on his further planning. Finally, there are three options that we would like to present today.


Maintain land charge

Maintain land charge

The simplest procedure is to do nothing. Then the registered land charges remain. This can even be an advantage, because if future borrowing is planned, the existing land charges can continue to be used – at least if the borrowing is from the same lender.

If, on the other hand, the borrowing is to take place at another financial institution, there is a need to rewrite the land charges or to make a so-called assignment. However, assignment is still cheaper than entering new land charges.

One thing has to be considered, however, if a land charge is to continue to exist. If there are other liabilities to the bank (eg due to vehicle financing), the property continues to serve as security. In the worst scenario, enforcement of the property cannot be ruled out.


Conversion into an owner’s land charge

loan payment

For this very reason, many property owners prefer to convert their land charges into so-called owner land charges. Then the land cartoons are on themselves, which may sound illogical at first, but can still be practical.

As a result of the conversion, the security claim of the old mortgagee is lost, but at the same time it is possible to rewrite or assign your own mortgage at any time. If one day a new borrowing is planned, the transfer of real estate would be cheaper than a new registration of real estate.



loan payment

Finally, the deletion remains. It ensures clear conditions in the land register and can also speed up property sales, for example, since it would not be necessary to obtain cancellation permits. On the other hand, there is a disadvantage: If one day a loan is needed, which the bank only pays out against collateral by means of a mortgage, the mortgage must be re-entered, which causes corresponding expenses.


Your real estate finance experts

Your real estate finance experts

Do you have any questions about securing land charges or are you even looking for cheap real estate financing? Our specialists will be happy to advise you and can evaluate the conditions of more than 400 banks, building societies and insurers. With us you do not take any risks, ie there are no costs and in the end you decide where and with whom you finance. We look forward to your inquiry.

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