What is Mortgage?
A Mortgage is the transfer of an interest in immovable property to secure a loan. Indian law recognises six types — including registered, equitable (deposit of title deeds), English and conditional. Registered and equitable mortgages are most common in bank lending.
| Meaning | A Mortgage is the transfer of an interest in immovable property to secure a loan. Indian law recognises six types — including registered, equitable (deposit of title deeds), English and conditional. Registered and equitable mortgages are most common in bank lending. |
|---|---|
| Category | Banking |
| Related Laws | Transfer of Property Act 1882, Sections 58–104 |
| Who Uses It | Borrowers, banks, sub-registrars |
| Why It Matters | Creates the security interest that supports SARFAESI action. |
Mortgage explained in plain English
A practitioner's view written for borrowers and advisors — not a textbook definition.
A Mortgage is the transfer of an interest in immovable property to secure a loan. Indian law recognises six types — including registered, equitable (deposit of title deeds), English and conditional. Registered and equitable mortgages are most common in bank lending.
In practice, Mortgage is used most often by borrowers, banks, sub-registrars. Each of them sees the term from a slightly different angle: borrowers care about protection and outcomes, lenders care about classification and recovery, regulators care about consistency and disclosure.
The legal anchor for Mortgage is Transfer of Property Act 1882, Sections 58–104. RBI master directions, the SARFAESI Act 2002, the RDB Act 1993 and the IBC 2016 commonly interplay, depending on the loan size, security and stage of stress.
Why does it matter? Creates the security interest that supports SARFAESI action. For a stressed borrower, getting this concept right early often saves several months of penal interest, legal cost and credit-score damage.
A real example: A house mortgaged by deposit of title deeds with the bank secures a ₹60 lakh home loan. The mechanics may look complex, but the underlying logic — the bank wants closure, the borrower wants a fair outcome — is straightforward once the right framework is in place.
If you are facing a situation involving Mortgage, the safest first step is a structured case review with a senior ex-banker who has handled comparable matters across banks and ARCs in India.
Where you'll encounter Mortgage
Whenever a loan moves from "Standard" to "stressed", Mortgage is one of the words that starts appearing in notices, bank emails and lawyers' opinions.
Sanctioning committees, recovery teams and risk officers use Mortgage to classify accounts, decide provisioning and approve resolution paths.
Mortgage appears in pleadings, securitisation applications, OAs, Section 7/9 petitions and SARFAESI writs as part of the dispute record.
When stressed loans are sold to ARCs or special-situations investors, Mortgage is used in term sheets, assignment agreements and due-diligence reports.