Key differences between registered and equitable mortgage

1
Key differences between registered and equitable
mortgage
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What does equitable mortgage mean?

• The lender and borrower mutually decide on the
  loan terms and conditions.

3
Understanding the working of equitable mortgage

• The borrower transfers the property title deed to
  the lender.
• A charge is created on the mortgaged property.

4
What does a registered mortgage mean?

• Such a mortgage needs approval from the sub
  registrar's office.

5
Understanding the working of registered mortgage

• A charge on the property is to be created with
  the sub-registrar.
• The title is restored to the borrower after the
  successful loan repayment.

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Key distinctions between registered and equitable
mortgage
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Registration and process

• An equitable mortgage does not require
  registration, but a registered mortgage does.
• The equitable mortgage requires purchasing of
  stamp paper.
• For a registered mortgage, you need to contact
  the sub-registrar office.

8
Mortgage cost

• Stamp duty for an equitable mortgage is between
  0.1 and 0.2 of the property value.
• Stamp duty for a registered mortgage is 5.

9
Risk involved

• An equitable mortgage is riskier than a
  registered mortgage.

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Points to consider when choosing between these
two mortgages

• The registered mortgage gives the lender more
  power than the borrower.
• The registered mortgage is less risky as both
  parties are bound by a legal agreement.

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• Always remember that a registered mortgage has a
  slight edge over an equitable mortgage.

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