Not by payment alone. The mortgage is registered in the Public Registry and payment, by itself, does not change what the Registry says. Mexico City's code puts it this way: “A mortgage produces all its legal effects against third parties for as long as its registration is not cancelled” (article 2940), and registrations “are extinguished as regards third parties only by their cancellation or by the registration of the transfer of the registered ownership or real right in favor of another person” (article 3028) [1]. The State of Mexico's code provides that any act or agreement between the parties that may modify or destroy the effectiveness of an earlier mortgage obligation “shall have no effect against third parties unless it is recorded in the Public Registry of Property by means of a new registration, a total or partial cancellation or a registry note, as the case may be” (article 7.1131) [2].
What payment does give you is the ground for requesting cancellation, if it extinguished the obligation the mortgage secured. In Mexico City, when the obligation it secured is extinguished, “the extinction of the mortgage may be requested and, where appropriate, must be ordered” (article 2941, section II), and the total cancellation of a registration may be requested when the registered right is completely extinguished (article 3033, section II) [1]. In the State of Mexico, the mortgage ends when the obligation it secured is extinguished (article 7.1145, section II) [2].
This matters before selling. When the deed transferring ownership of a property is about to be executed, the notary must request from the Registry a certificate on the existence or non-existence of encumbrances or annotations (article 3016 of Mexico City's code and article 8.23 of the State of Mexico's) [1] [2]. That certificate records all entries in force (article 84 of the Registry Law for Mexico City and article 80 of the Registry Law for the State of Mexico) [3] [4]. If the registration of your mortgage is still in force, it will appear there.
What to ask your lender for
If it was Infonavit, its portal sets out the steps. Check in Mi Cuenta Infonavit that your loan appears as paid off and generate there the Carta de Instrucción de Cancelación de Hipoteca (mortgage cancellation instruction letter). With that letter you start the release-of-encumbrance procedure at a notary's office or through the Public Registry of Property, in accordance with the laws of your state. The portal warns that the letter is valid for 180 days, that if you go directly to the Registry you must first ask Infonavit to validate your documents and that the requirements depend on each state [5].
If it was a bank or another creditor, what follows is our recommendation and not an official procedure. Ask in writing for confirmation that the loan was paid off and ask which document the creditor issues to cancel the mortgage and how it is formalized. Say so if there were restructurings, a change of creditor or more than one loan on the same house.
If more than one creditor appears in your deed, ask each of them. Cancellation by consent is given by the persons in whose favor the registration was made (article 3030 of Mexico City's code) or, in the State of Mexico, by those persons or their successors in title (article 8.43) [1] [2].
What form the law requires for cancellation
In Mexico City, registrations may be cancelled by court order or by consent of the persons in whose favor they were made (article 3030). To cancel by consent, that consent “must be set out in a notarial instrument that meets the requirements for such an act” (article 3031) [1].
In the State of Mexico, registrations may be cancelled by consent of the persons in whose favor they were made or of their successors in title, or by court order (article 8.43). To cancel by consent, that consent “must be set out in a public deed” (article 8.44) [2].
Both codes also provide for cases in which cancellation may be made at the request of a party when the registered right is extinguished, on the conditions set by each article (3030 in Mexico City and 8.43 in the State of Mexico) [1] [2]. Which route applies to your case is determined with your documents.
To take effect against third parties, the cancellation is recorded in the Registry (article 2925 of Mexico City's code and article 7.1131 of the State of Mexico's) [1] [2]. In the capital it is the Public Registry of Property and Commerce (Registro Público de la Propiedad y de Comercio), whose portal today lists “Cancelación de Hipoteca” (mortgage cancellation) among the acts for registration [6]. In the State of Mexico, the Public Registry of Property operates under the responsibility of the Instituto de la Función Registral del Estado de México, the IFREM (article 2 of the Registry Law for the State of Mexico) [4].
A useful point if your loan underwent changes: both codes order that, when a mortgage is cancelled, the entries for mortgage certificates (cédulas hipotecarias), restructurings, extensions or modifications be cancelled ex officio and at the same time, even if the instrument does not mention them expressly (article 3033, section VI, second paragraph, in Mexico City; article 8.46, last paragraph, in the State of Mexico) [1] [2].
How to check that it was cancelled
With a certificate from the Registry. In Mexico City, the Public Registry of Property and Commerce offers it as the Certificado de Existencia o Inexistencia de Gravámenes Único (single certificate of existence or non-existence of encumbrances) [7]. In the State of Mexico, the IFREM publishes it as the Certificado de Existencia o Inexistencia de Gravámenes (certificate of existence or non-existence of encumbrances) [8].
In both cases the law orders that the certificate record all entries in force (article 84 of the Registry Law for Mexico City and article 80 of the Registry Law for the State of Mexico) [3] [4]. If the mortgage no longer appears, the Registry no longer reports it among the entries in force. And once an entry is cancelled, the right to which that entry refers is presumed extinguished (article 3036 of Mexico City's code and article 8.50 of the State of Mexico's) [1] [2].
Our recommendation: keep the proof that the filing entered the Registry, but do not take it as proof of cancellation. Request the certificate after the cancellation has been registered.