You contact your bank and ask them to discharge the mortgage at settlement. You can either get the discharge authority form from their website or they’ll send you one to sign. The sooner you sign it the better, because a bank can take one to two weeks to process it.
Unless your contract says otherwise, the property is sold free of all encumbrances, so any mortgage, caveat or other encumbrance must be discharged at settlement for the buyer to receive a clear title.
A discharging lender that isn’t ready is the most common reason a seller delays settlement. A seller who delays can be liable to pay penalty interest to the buyer.
