You should check with your lender. They won't release it from the mortgage, you have to apply for a term-loan, which will be cleared from the mortgage. Not all banks offer it, I know that BOI, PTSB, ICS do and that Bank of Scotland doesn't. Not sure about the rest. So ask your lender!
When your bid is the successful one, you have to put down a booking deposit (usually 5K), the contract deposit (10% of purchase price minus booking deposit) is usually due when you sign contracts. In some cases, a much smaller contract deposit is possible with the new 100% mortgages, but you have to discuss this with the EA and the solicitor.