Which term best refers to a mortgage that allows partial releases upon payment of the debt?

A mortgage that allows for partial releases upon payment of the debt is best referred to as a blanket loan. This type of mortgage covers multiple properties or lots and provides the borrower with the option to release individual parcels or properties from the loan as specific payments are made. This feature is particularly beneficial for developers or investors who may want to sell off portions of their real estate holdings while still having remaining collateral backing the loan.

The option of releasing parts of the mortgage is valuable because it enables borrowers to improve their cash flow by monetizing portions of their investment without needing to refinance the entire loan. This characteristic is distinctive to blanket loans, which differentiates them from other loan types.

Open loans generally refer to loans that can be paid off early without penalties, while flexible loans do not specifically denote partial releases and may focus instead on varying payment schedules or terms. Fixed loans are defined by having a set interest rate and payment schedule over the term of the loan, lacking the unique features provided by blanket loans for multiple parcels.