What is the Difference Between a Registered Mortgage and an Equitable Mortgage?

A mortgage is a specific immovable property that the borrower of a loan has to transfer to the lender to secure the money advanced by the lender to create a liability. There are generally two types of mortgages- the registered mortgage and the unregistered or equitable mortgage. There are some key differences lies in between these two, which follows – 

● In the case of a registered mortgage, the lender (mortgagee) and the borrower (mortgagor)need to adhere to specific terms and conditions set by a third party to approve and finalize the mortgage agreement. In contrast, the equitable mortgage is mutually agreed solely by a mortgagor and a mortgagee without the involvement of any third party or trust company. 

● The stamp duty is almost negligible and comes to only 0.1 to 0.2 % of the total loan amount regarding the equitable mortgage. Still, for a registered mortgaged property, it goes up to 5% of the total loan amount.  

● There’s one more fundamental difference: in an equitable mortgage, if you default to repay the loan, the bank can auction off the property to recover the amount. In contrast, in a registered mortgage, the bank can take any step for the property if you fail to repay the said loan amount.