Mortgage paid off – what to do with the promissory note?

08.10.2020

The security for a loan (mortgage) taken out for the construction or purchase of a house is almost always a promissory note. Before 2012, mortgages were generally established in the form of a paper mortgage note. The paper mortgage note is a security, the issuance of which can be demanded by the creditor after the debt has been fully repaid.

If you are sure that you no longer wish to use the paper certificate, you can return it to the land registry and have the entry in the land register deleted. This saves the costs of storage at the bank or the purchase of a safe. If, however, it is still uncertain whether the mortgage note can be reused, it may well be worth keeping it in view of the costs of a new mortgage note.

With a paper mortgage note, however, it is essential that it is kept safe. In the event of loss, the bond must be declared invalid by a court. This causes a lot of administrative work and high costs.

Since the introduction of the Registered Debt Certificate in 2012, debt security claims can also be created purely electronically by entry in the land register. Since then, it has also been possible to convert paper promissory notes into registered promissory notes. In this way, the debt certificate continues to exist electronically and the effort and uncertainty of storage is saved.

When a loan has been fully repaid, a written application from the landowner to the competent land registry office is sufficient to convert a mortgage note.