What is a due-on-sale clause?


What is a due-on-sale-clause?

The financial term of the day is: "Due-on-Sale Clause."

If you snagged a mortgage at a very low interest rate, your lender may want to make sure that the great rate doesn't stay with the house when it's sold. The loan will include a provision called a due-on-sale clause stipulating that the mortgage must be paid off and cannot be transferred to a new owner when the property changes hands.

A due-on-sale clause requires that when a home sale is finished, so is the old mortgage.

To shop for the perfect home loan, visit the Mortgage section at


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