What Is a Due‐on‐Sale Clause?

A due‑on‑sale clause is a provision in a mortgage that allows the lender to declare the entire loan balance immediately due and payable if the borrower transfers the property, or any ownership interest in it, without the lender’s prior written consent.

The trigger is the transfer itself, not missed payments or financial distress.

12 C.F.R. § 191.2(b) defines a due‑on‑sale clause as:

(b) Due-on-sale clause means a contract provision which authorizes the lender, at its option, to declare immediately due and payable sums secured by the lender’s security instrument upon a sale of transfer of all or any part of the real property securing the loan without the lender’s prior written consent. . . .

For the regulatory definition of what counts as a “sale or transfer,” see: What Counts as a “Transfer” Under a Due‑on‑Sale Clause?

For related posts and primary authority, see: Due‑on‑Sale Clause.