What happens to a property loan (mortgage) if the borrower dies?

If the loan had a co-borrower (such as your mother, if she was jointly named on the loan), that co-borrower generally remains responsible for continuing the repayment. If your father had a loan protection or life insurance policy specifically covering the loan, the outstanding amount may be settled through that insurance claim instead.

Where neither of these applies, the loan liability typically doesn't simply disappear — it becomes a debt against your father's estate, meaning legal heirs who wish to inherit the property generally need to either continue servicing the loan, or settle it in some way (through repayment, sale of the property, or refinancing) before they can have clear, unencumbered ownership.

Importantly, legal heirs aren't typically personally liable for the debt beyond the value of what they actually inherit from the estate — they can, in principle, choose to relinquish their claim on the property rather than take on the loan burden, though this is a significant decision. It would be worthwhile speaking with the bank about the outstanding loan status and consulting a lawyer about your family's specific options going forward.