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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Partial release (of security)

What is a partial release of security, and what does a bank ask for in return?

ONE OF 366 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A partial release frees one asset from a bank's security, such as a block of land, one property in a portfolio or a vehicle, while the loan and the rest of the security stay in place. The borrower usually wants it to sell the asset, and the bank decides two things: how much of the sale proceeds must reduce the debt, and whether what remains still supports the loan on the bank's loan-to-value and cover tests. Because most security is all-monies, a release is a fresh credit decision rather than an administrative step, and over land it is documented as a partial discharge of the mortgage.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// WHAT IT IS NOT

A release price is the figure set in advance, unit by unit, in a development loan; a partial release is the wider act of freeing any one asset, usually negotiated case by case.

// WORKED IN

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SECURITY AND RANKING

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