Once a loan secured by a mortgage is fully paid, the lien does not disappear on its own. The mortgage annotation stays on the land title (or the vehicle's registration) until the lender executes a Release and Cancellation of Mortgage and the Registry of Deeds — or the LTO — cancels it. Without this document, the borrower's title remains encumbered on paper, which can block a future sale, loan, or transfer. This guide explains what the release must contain, who signs it, and how to use it to clear the title.
What Is a Release and Cancellation of Mortgage?
A Release and Cancellation of Mortgage is a notarized instrument executed by the mortgagee (the creditor) acknowledging that the secured obligation has been fully paid and formally releasing, discharging, and cancelling the mortgage and the lien it created. It identifies the original mortgage being discharged and authorizes the Register of Deeds (for real property) or the proper registry and the LTO (for a vehicle) to cancel the annotation or registration.
Because it is the mortgagee who holds the lien, it is the mortgagee who executes the release. The borrower keeps the original notarized release to present to the Registry of Deeds and to prove, going forward, that the property is free of the mortgage.
When Do You Need One?
- After full payment of a loan secured by a real estate or chattel mortgage.
- Before selling or refinancing — a buyer or new lender will require a clean title with the old mortgage cancelled.
- To clear a vehicle's Certificate of Registration of an LTO-annotated chattel mortgage after the auto loan is paid.
- To formally close out a private loan where the lender took a mortgage as security.
Legal Basis
- Civil Code Article 2085 and the mortgage being accessory — A mortgage is extinguished when the principal obligation it secures is paid; the release simply documents that extinguishment.
- Property Registration Decree (PD 1529) — Governs the cancellation of the mortgage annotation on the Transfer Certificate of Title by the Register of Deeds upon presentation of the release.
- Act No. 1508 (Chattel Mortgage Law) — Governs the discharge and cancellation of registration of a chattel mortgage.
- LTO regulations — Require presentation of the release to cancel a mortgage annotation on a motor vehicle's Certificate of Registration.
- 2004 Rules on Notarial Practice — The release must be notarized to be registrable.
Required Elements of a Release and Cancellation of Mortgage
- The releasing party (mortgagee) — full name, civil status, citizenship, and address.
- Reference to the original mortgage — its date, the mortgagor, the type (real estate or chattel), and ideally the notarial details (notary, Doc./Page/Book/Series).
- Description of the encumbered property — the TCT number and Registry for land, or the description for a chattel.
- Recital of full payment — that the obligation has been fully paid, settled, and discharged.
- Words of release — that the mortgagee forever RELEASES, DISCHARGES, and CANCELS the mortgage and the lien.
- Mortgagee's warranty — that it is the lawful holder of the mortgage and has not assigned it.
- Authority to cancel — authorizing the Register of Deeds (or the LTO/registry) to cancel the annotation or registration.
- Date and place, the mortgagee's signature, and a notarial acknowledgment block.
Sample Release and Cancellation of Mortgage
Below is a representative excerpt discharging a fully paid real estate mortgage. Use Legalia Pro to generate a complete, notary-ready release for either a real estate or chattel mortgage, with the original mortgage details filled in.
This Release and Cancellation of Mortgage is executed by:
Maria Santos, of legal age, Filipino, single, and a resident of 456 Mabini Street, Barangay Poblacion, Makati City, hereinafter referred to as the Mortgagee;
WHEREAS, on June 3, 2025, the Mortgagor, Juan Dela Cruz, executed in favor of the Mortgagee a Deed of Real Estate Mortgage to secure an obligation, acknowledged before Atty. Jose Manalo, and entered in his/her notarial register as Doc. No. 123, Page No. 25, Book No. V, Series of 2025;
WHEREAS, the said mortgage encumbers a parcel of land covered by Transfer Certificate of Title No. T-123456 issued by the Registry of Deeds of Quezon City and more particularly described as follows: a parcel of residential land, Lot 5, Block 12 of the consolidation-subdivision plan, situated in Pasig City.
WHEREAS, the Mortgagor has fully paid, settled, and discharged the entire obligation secured by the said mortgage;
NOW, THEREFORE, for and in consideration of the full payment of the obligation secured by the said mortgage, the Mortgagee, having this date received from the Mortgagor the full sum of Five Hundred Thousand Pesos (500,000.00), Philippine currency, together with all accrued interest thereon, the receipt whereof is hereby acknowledged to the Mortgagee's full and complete satisfaction, does hereby forever RELEASE, DISCHARGE, and CANCEL the mortgage described above and the lien created thereby over the above-described property, which property shall, as between the parties, be free and clear of the encumbrance created by the said mortgage.
The Mortgagee represents and warrants that the Mortgagee is the lawful holder of the said mortgage and the obligation secured thereby, has full right and authority to execute this Release and Cancellation of Mortgage, and has not assigned, transferred, or otherwise disposed of the said mortgage or the obligation secured thereby to any other person.
The Register of Deeds of Registry of Deeds of Quezon City is hereby authorized and requested to cancel the mortgage annotation or encumbrance inscribed on Transfer Certificate of Title No. T-123456 by reason of the said mortgage.
This Release and Cancellation of Mortgage shall bind and inure to the benefit of the parties and their respective heirs, successors, assigns, and representatives.
IN WITNESS WHEREOF, the Mortgagee has hereunto signed this Release and Cancellation of Mortgage on June 3, 2026 at Quezon City, Philippines.
BEFORE ME, a Notary Public for and in the above jurisdiction, this June 3, 2026, personally appeared:
| Name | Competent Evidence of Identity |
|---|---|
| MARIA SANTOS | Philippine Passport No. P7654321B |
known to me and to me known to be the same person who executed the foregoing instrument, and acknowledged to me that the same is his/her free and voluntary act and deed.
WITNESS MY HAND AND SEAL on the date and at the place first above written.
Generate Your Release and Cancellation of Mortgage — Pro Plan Required
This document is available on the Legalia Pro plan. Subscribe to generate a pre-formatted, notary-ready release for either a real estate or a chattel mortgage — referencing the original mortgage and authorizing cancellation of the annotation or registration.
Subscribe to Pro — Generate NowHow to Use a Release and Cancellation of Mortgage
- Confirm full payment. The mortgagee should release only after the secured obligation is fully paid and settled.
- Identify the original mortgage. Fill in its date, the mortgagor, the type, and the original notarial details so the Registry can match the release to the annotation.
- Describe the property and recite payment. State the TCT and Registry (or chattel description) and that the obligation has been fully discharged.
- Insert the words of release and the authority to cancel. The mortgagee releases the lien and authorizes the Register of Deeds (or LTO) to cancel the annotation.
- Notarize and register. The mortgagee signs before a notary; then present the release to the Registry of Deeds (and the LTO for a vehicle) to cancel the encumbrance and clear the title.