What are the different types of mortgage recognised under Indian law?

Question

I am taking a home loan and the bank wants to create an equitable mortgage over my property. What does this mean compared to other types of mortgage? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

What are the different types of mortgage recognised under Indian law? is governed in India primarily by Transfer of Property Act 1882, Section 58, Registration Act 1908, Section 17 and Transfer of Property Act 1882, Section 60. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 58 of the Transfer of Property Act recognises several kinds of mortgage including simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage, and mortgage by deposit of title deeds, also called an equitable mortgage.

An equitable mortgage under Section 58(f) is created simply by depositing the title deeds of the property with the creditor in notified towns, without needing a registered mortgage deed, making it the most common form used by banks for home loans.

A simple mortgage does not transfer possession to the lender but gives the lender the right to sell the property through court intervention if the borrower defaults, without a personal covenant to pay being essential.

Section 60 gives the mortgagor a right to redeem the property by paying the full mortgage debt, and any clause that tries to permanently extinguish this right, known as a 'clog on redemption', is void.

Registered mortgages, other than equitable mortgages by deposit of title deeds, generally require registration under Section 17 of the Registration Act when the principal amount secured is Rs 100 or more.

What to do next: 1) Check your loan documents to identify which type of mortgage has been created over your property; 2) Ensure the bank returns your original title deeds once the loan is fully repaid and the equitable mortgage is discharged; 3) Obtain a mortgage discharge or 'no objection' letter and get it noted in revenue or municipal records where applicable; 4) Consult a lawyer if you suspect any clause in your loan agreement improperly restricts your right of redemption.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Transfer of Property Act 1882, Section 58 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.