What does cessation of charge mean?

Definition of Cessation of Charge

A cessation of charge ends is the official termination of a mortgage. A cessation of charge is a legal method of dissolving all the agreements of a mortgage, either upon completion of payment by the borrower or due to a cancelled mortgage contract. This official termination of the mortgage takes place within the Land Titles System.

Why is this term important?

A cessation of charge ends all the agreements of a mortgage upon completion of payment. This is important as a mortgage loan is often secured against a house and the debt can out last any one particular home owner. Without a cessation of charge, the record of the debt would remain on the title to the home and could hinder future borrowing applications or options to sell the home.

Examples of term

Most people take out a mortgage in order to pay for a house and this loan is then paid off over a period of years. If you bought your house with a 20-year mortgage and made your monthly payments for that entire time-period, at the end of 20 years you would receive documentation from your lender to confirm a cessation of charge has been filed at and that your mortgage terms have been fulfilled.