Your key priorities when winding down your mortgage

Your end-of-mortgage checklist

• Reassess your home insurance.
• Review your title.
• Review your estate plan and will.
• Assess your personal insurance situation.
• Think about your next financial steps.

Three key priorities

There are three key practical steps to take well in advance of paying off your mortgage.

1. Check the insurance

Your home is likely to be your biggest asset, so it’s crucial to make sure it’s appropriately covered. Research shows that 29% of homeowners don’t have home and contents insurance and 40% of households with insurance are underinsured.¹

You need to have a realistic idea of what your home and contents are worth. This is likely to change significantly over your years of homeownership.

If in the face of loss or damage to your home contents, you don’t have the funds available to replace or rebuild, it could mean a financial setback.

Want to work out what it could cost to rebuild your home or replace your contents? The Insurance Council of Australia has a calculator you can use. Then you can make sure you have enough insurance to cover the costs.

2. Revise your title

When you have a home loan, the bank holds the Certificate of Title until the loan has been repaid. At that point, you need to remove the lender from your title. When you’re at the tail end of your mortgage, you need to discharge your home loan. If it’s not done properly, it can impact your ability to sell your property quickly and efficiently.

Here’s how it’s done:

• Contact your lender – they’ll ask you to complete a mortgage discharge authority form.
• Complete the form as shown – it takes at least 10 business days to process your discharge, so think ahead if you need a quick sale or refinance.
• Register your discharge and Certificate of Title – at the Land Titles office in your state. Your lender can do this for you or you can do it yourself. If you are managing the process, below is where you’ll find the information you need.
• Some titles are also held electronically now so make sure you speak to your mortgage specialist to find out if this is applicable to you.

Below are links to the Land Titles offices in each state and territory.

New South Wales

Victoria

Queensland

ACT

Western Australia

South Australia

Northern Territory

Tasmania

3. Review your estate plan and will

If you don’t have a will, it should be one of your key priorities. If you die ‘intestate’ – that is, without a will – it creates a huge amount of complexity over your estate. The Court will appoint an administrator and this may not be the person who you would’ve chosen if a will was made. It’s a much more expensive and time-consuming process.

Working with a financial planner can make the process of putting your will together easier.

It’s also important to review your will and estate plan regularly and to update it if significant life events change your intentions regarding your estate.

These could include real estate purchases, marriage or divorce, the death of one of your beneficiaries or the birth of a potential new one. Developing an estate plan can help you protect and arrange the transfer of jointly held assets, trust assets, and superannuation benefits. These types of assets are not dealt with in a will. For example, your superannuation benefits can be distributed at the discretion of the superannuation trustee. You can put in place ‘death benefit nominations’ to ensure super benefits go to the people or organisations you choose.

You’ve done so well with your mortgage – make sure you make it over the final hurdles easily.