Demand Clause is a provision in a mortgage document empowering the lenders to demand payments of the total outstanding balance for any reasons.

Facts about Demand Clause:

Demand clause is better than a due on sale clause where the loan must be repaid upon the sale of property. Its objective is to protect the mortgage lenders against rising rates of interest or demand additional collateral under certain conditions such as bankruptcy, failure to pay taxes on mortgaged property, etc.