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Glossary

Discharge

The closing of a loan account, whether by refinance to another lender, sale of the property or full repayment. Trail stops immediately and, if it happens inside the clawback window, upfront is recovered.

A discharge is the event that ends a loan's life with a lender, and for a broker it is the moment two things happen at once: the trail on that loan stops, and the lender checks the settlement date to see whether a clawback applies. On a commission statement it typically appears as a DISCHARGED payment type, sometimes with the last partial month of trail, sometimes with a negative upfront line a month or two later.

Not every discharge is a loss of the client. Some are property sales where the client will buy again, some are refinances the broker arranged to a better product, and some are full repayments by clients who have simply finished. What matters for the book is which loans are discharging and why, because a pattern of discharges to other lenders at months 13 to 26 is the signature of a book that is not being repriced.

The practical response is to track discharges monthly against the settlement date and the clawback schedule, so every one is either expected or investigated.

How it shows up

  • Month 1: loan appears as DISCHARGED, trail line drops to a partial month
  • Month 2 or 3: negative UPFRONT line for the clawback, if inside the window
  • The client's other loans, if any, keep paying trail

Frequently asked questions

Do I get told before a client discharges?

Rarely. Some lenders notify the aggregator when a discharge request is lodged, and some aggregators pass it on, but the first reliable signal is often the statement itself. Watching for expiring fixed rates and rate gaps is the earlier warning.

Does a partial discharge trigger clawback?

Usually only if the balance falls below a lender-specific threshold, and often only pro-rata. Lump-sum repayments are more commonly treated as balance reductions that lower trail rather than as discharges.

General information only — not credit advice. Figures are indicative estimates and may not reflect your circumstances. Consider seeking advice from a licensed professional before acting on this information.

Last reviewed 05/09/2026 · Not yet verified against lender material