Mortgage

Definition

A mortgage creates a legal charge on immovable property in favor of the lender. In India, mortgages are governed by the Transfer of Property Act, 1882. The most common form for home loans is equitable mortgage (deposit of title deeds).

Some states require registered mortgage with stamp duty. The mortgage gives lenders the right to sell property through SARFAESI Act proceedings if the borrower defaults. It is released upon full repayment with original documents returned.

Frequently Asked Questions

What is an equitable mortgage? ▾

Created when the borrower deposits original property documents with the lender as security. Most common form for home loans, doesn't require registration in most states.

Is stamp duty payable on a mortgage? ▾

For equitable mortgages, stamp duty is minimal or nil. Registered mortgages (required in some states) may attract 0.1-1% stamp duty on loan amount.

How is a mortgage different from a home loan? ▾

A home loan is the credit facility (money borrowed); a mortgage is the legal charge on property as security. The mortgage is the security mechanism; the home loan is the financial product.

Why It Matters

The mortgage is the legal mechanism enabling property-based borrowing. Understanding types, costs, and implications helps protect property rights while accessing credit.

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