What is the name of the provision in a mortgage contract that requires full payment upon the sale of the property?

The provision in a mortgage contract that requires full payment upon the sale of the property is known as the due-on-sale clause. This clause allows the lender to demand the outstanding balance of the loan to be paid in full if the borrower sells the property or transfers ownership. This is significant because it protects the lender's interest, ensuring that the loan does not remain attached to a new owner who was not approved to take on the financing.

In situations where a due-on-sale clause is enforced, a borrower might need to pay off the mortgage entirely when selling the home, or alternatively, the buyer may need to secure their own financing to purchase the home, which could affect the sale process and negotiations.

Other terms, such as a release clause, pertain to allowing the borrower to pay off the mortgage under certain conditions without penalty, while a prepayment option would refer to the borrower’s ability to pay off the loan early without facing additional fees. A payment trigger does not refer to standard mortgage terminology in this context, making it less relevant. Thus, the due-on-sale clause is the correct term for this specific requirement in mortgage agreements.