How Does My Mortgage Get Paid Out When I Sell My Home in BC?

This answer covers the law of British Columbia.

Your mortgage is paid off from the sale money on completion, and what remains after that goes to you. Payment is normally arranged by whoever handles the transfer for you, and a lawyer or a notary public in good standing can prepare the transfer.

A person transferring land in fee simple must deliver a transfer that can be registered under the Land Title Act. A payout statement is the lender's written figure for what you owe on a stated date, including any interest or penalty. A lawyer's undertaking is a written promise to the lender that the mortgage will be paid from the sale funds.

If your mortgage was not payable until more than five years after it was made and five years have passed, you may pay off the amount owing plus three months' interest in place of notice, though this rule excludes mortgages given by corporations and certain prescribed entities. Exactly when the cleared title is registered and when the leftover money reaches you depends on your contract of sale, your lender and the people handling the closing, so ask them for a timeline in advance. Request the payout statement early and check that its figures match your mortgage contract.