What is the correct way to apply and release the handbrake?

When applying the handbrake, you need to press the release button and lift it all the way to the top and then let go of the release button. This will ensure the parking brake is fully engaged. Some people forget to press the button on the handbrake when lifting it up and therefore hear a grinding noise which should be avoided as it wears the ratchet mechanism.

To release the parking brake, you just need to press the release button in and move the lever slightly up before pushing it down completely. This engages the ratchet and allows you to smoothly push the lever to the floor.

Note Some people argue the clicking sound they hear when applying the handbrake allows them to judge whether it needs replacing (if it's more than 5-7 clicks) but really if you see the lever going too high up when you're lifting it, that's one sign the cable is too loose among other symptoms.

On modern cars (especially those where the parking brake is at the foot like on most automatic cars), you don't have a release button and pressing the parking brake makes that horrible sound but I suppose it's been designed this way without affecting the braking mechanism.