Three things, and the first needs doing within weeks
The day the final instalment goes through, it feels finished.
In law it is not.
Because clearing the debt is one thing, and removing the mortgage from the title deed is another, done at the land office.
Plenty of people never go, and discover it five years later when they try to sell.
The second thing is the documents the bank returns, which should be checked before filing rather than filed before checking.
The third is what disappears along with the debt, without anybody telling you.
One: the mortgage does not lift itself
When a mortgage is registered, it appears in the register of rights on the back of the title deed.
That entry does not vanish when the debt is repaid.
What has to happen is registering the redemption of the mortgage at the land office holding the deed.
The process is not difficult, but it has an order.
Step one, tell the bank the account is settled and ask for the documents. The bank issues the paperwork for redemption and returns the original title deed.
How long banks take varies, so ask on the day of the final payment rather than waiting to be contacted.
Step two, go to the land office with the documents: the original deed, the identity card of the person redeeming, and the mortgagee's evidence of redemption.
Step three, pay the fees, which are very small.
Registering redemption of a mortgage costs 50 baht per parcel, the application 5 baht per parcel, and a witness fee of 20 baht where a witness is required.
Notice these are figures in tens of baht, not tens of thousands.
Which means the reason people never go is not money. It is that nobody told them it needed doing.
Step four, check the back of the deed before leaving the land office, confirming the redemption has actually been recorded.
That fourth step takes a minute and closes the whole matter.
What happens if you never redeem it
Nothing happens tomorrow, which is why people put it off.
What happens, happens on the day the deed is needed.
- You cannot sell, because a buyer will not take a transfer of a deed still showing a mortgage.
- You cannot borrow against it, because a new bank wants security free of encumbrance.
- You cannot give it to a child or do anything else with it until it has been redeemed.
- The longer it sits, the harder it gets, because if the bank merges, renames or closes that branch, chasing the paperwork backwards takes far longer.
That last is why this belongs in the next few weeks rather than the next few years.
Two: check the documents before filing them
On the day the deed comes back, four things are worth doing before it goes into a drawer.
Confirm it is the original and not a copy, which is visible from the paper itself and its seal.
Check the deed number, parcel number and area against what you remember, because mistakes happen in households with several parcels.
Read the register of rights on the back, to see what else is recorded there besides the mortgage just redeemed.
What sometimes appears without the owner ever knowing is a servitude, a usufruct, or an old caveat entry.
If something unfamiliar turns up, ask the officer there and then, because coming back to ask means coming back.
Photograph every page including the back, and keep the files somewhere other than where the deed is.
Photographs do not substitute for the deed, but they answer questions without having to take it out.
Where to keep the deed
People use three answers, and each has its drawback.
At home, the most convenient and the most exposed, because fire, flooding and somebody in the house taking it are all real risks.
If you choose this, use a fire resistant safe and tell at least one trusted person where it is.
In a bank safe deposit box, safer, with an annual cost.
The caution is that somebody else must know the box exists, or when the owner is gone nobody knows where the deed is.
Deposited with the land office, which offers a deed custody service and which few people know exists.
Whichever you choose, the same thing applies: the family has to know where it is.
A deed nobody can find causes the same trouble as a will nobody can find, covered in why a homemade will fails.
Three: what disappears along with the debt
When the loan agreement ends, several things end with it and nobody writes to say so.
The fire insurance the bank used to handle. In many cases the bank managed renewals, because it was a loan condition.
When the loan ends, that condition ends, and renewing becomes the owner's job.
A house with no fire insurance breaks no law, but it is a house with nothing behind it if something happens, and what is really covered is set out in what home fire insurance actually covers.
Mortgage life insurance, if taken out, is worth checking for any remaining cover and any surrender value.
Some people paid the whole premium at the outset, so ask what is left rather than letting it pass.
The tax deduction for home loan interest, which is a deduction available against interest actually paid.
With no interest, that deduction goes too.
Which means the tax due the following year can be higher on the same income.
That is not a reason to stay in debt. It is a number worth knowing in advance so it is not a surprise.
Automatic payment arrangements should be checked as genuinely cancelled, because some accounts keep deducting other charges.
What does not disappear
The land and buildings tax still has to be paid, because it is a tax on the property rather than on the debt.
Estate or condominium common fees still have to be paid.
And the maintenance the house needs as it ages carries on, with no bank prompting anybody about it any more.
That last is the most underestimated, because during the loan years everything was organised for you.
What to do in the first thirty days
- Call the bank and ask when the redemption paperwork will be ready, on the day of the final payment.
- Book the trip to the land office as soon as the documents are complete.
- Read the register on the back of the deed at the counter, before leaving.
- Photograph every page of the deed and store the files elsewhere.
- Decide about fire insurance: whether to renew it and with whom.
- Tell at least two family members where the deed is.
All six together take less than a day and close everything outstanding.
Frequently asked questions
Does the mortgage lift itself once the loan is paid?
No. The entry stays in the register on the back of the title deed until redemption is registered at the land office.
What documents are needed?
The original title deed, the identity card of the person redeeming, and the mortgagee's evidence of redemption, which the bank issues after the account is settled.
What does it cost?
Registering redemption is 50 baht per parcel, the application 5 baht per parcel, and 20 baht for a witness where required. Tens of baht rather than tens of thousands.
What if I never do it?
Nothing tomorrow, but you cannot sell, cannot borrow against it, and cannot do anything else with it on the day the deed is needed. And the longer it sits the harder the paperwork gets to chase.
Do I still need fire insurance?
It is not a legal requirement once there is no loan, but it should be a decision rather than something that quietly lapses because the bank used to renew it.
Where should the deed be kept?
Three options: a fire resistant safe at home, a bank safe deposit box, or deposited with the land office. Whichever you choose, the family must know where it is.
In short
- Repaying the loan ends the debt. Redeeming the mortgage is a separate step you must take.
- The fees are in tens of baht, so money is not why people never go.
- Without redemption you cannot sell or borrow on the day you need to.
- The longer it sits, the harder the paperwork becomes to chase.
- Read the register on the back of the deed before leaving the land office.
- Fire insurance the bank used to renew becomes the owner's responsibility.
- The interest deduction disappears with the debt, so next year's tax may rise.
- Property tax and common fees continue exactly as before.
- Tell at least two family members where the deed is.