Due-On-Sale Clause

A due-on-sale clause is a provision in a mortgage or deed of trust that gives the lender the right to demand full repayment of the remaining loan balance if the property is sold or transferred without the lender’s consent. This clause is designed to protect the lender by ensuring that the mortgage loan is paid off when ownership of the property changes hands.

The due-on-sale clause is an important tool for lenders to manage risk and ensure that they maintain control over the terms and conditions of their loans, especially in fluctuating interest rate environments.