What is a deposit of title deeds mortgage?

A deposit of title deeds mortgage, also known as an equitable mortgage, is created when a borrower hands over the original ownership documents of a property to a lender as security for a loan, without executing a separate registered mortgage deed. It is the most common form of home loan security used by Indian banks and housing finance companies.

How It Works

• Borrower submits original title deeds and property documents to the lender
• Lender retains these documents for the duration of the loan tenure
• No separate registered mortgage deed is typically required in notified areas
• Documents are returned to the borrower upon full loan repayment

Advantages of This Mortgage Type

• Faster processing compared to a fully registered mortgage
• Lower cost, as it avoids additional stamp duty and registration expenses
• Widely accepted by banks for standard home loan transactions

Risks and Precautions

Borrowers should ensure they receive a proper acknowledgment or memorandum of deposit from the lender, and should verify that all original documents are returned promptly and completely after loan closure to avoid future title complications.

A deposit of title deeds mortgage offers a fast, cost-effective way for banks to secure home loans without the overhead of formal mortgage registration. Borrowers should carefully track and verify the return of all original documents once the loan is fully repaid.