What clause in a mortgage states that the total balance is due upon sale or transfer of the property?

The due-on-sale clause is a provision in a mortgage that stipulates the entire remaining balance of the loan must be paid in full if the property is sold or transferred. This clause protects the lender by preventing a borrower from passing on their mortgage obligation to someone else without the lender's consent. When a property changes hands, the lender can require that the loan be paid off, thereby ensuring they are repaid in full before the new owner assumes any interest in the property. In this context, the due-on-sale clause acts as a safeguard for the lender's investment.

In contrast, an acceleration clause allows the lender to demand immediate repayment of the entire loan balance if certain conditions are met, such as missed payments. A prepayment clause, on the other hand, outlines the terms under which a borrower may repay the loan earlier than scheduled, often specifying any penalties or fees for doing so. The term "sale clause" is not a standard term recognized in mortgage agreements and does not accurately describe a specific provision related to property transfer.