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When you apply for a home loan through financial platforms like Bajaj Markets, you must pledge the property as a collateral with the lending institution. This is what you call a mortgage. As the borrower is unable to make timely home loan repayments or default on the loan, the lender can auction off the mortgaged property to recoup its losses. What you probably didn't know was that two types of mortgages exist in the market, namely registered mortgage and equitable mortgage.

Registered Mortgage Meaning

A registered mortgage agreement sees the involvement of the local sub-registrar who must approve its terms before it is finalised. To execute this kind of a mortgage agreement, both the borrower and the lender must abide by the rules and regulations laid down by a sub-registrar.

Equitable Mortgage Meaning

An equitable mortgage is a kind of mortgage whose terms are solely agreed upon by the mortgagor and the mortgagee. There is no involvement of third-party government agencies in such agreements.

Difference Between Equitable Mortgage and Registered Mortgage


Registered Mortgage

Equitable Mortgage


A kind of mortgage agreement where the parties involved need to take the approval of the local sub-registrar to finalise it

A kind of mortgage agreement whose terms are solely decided by the mortgagor and the mortgagee


Equitable mortgages are not registered

Registered mortgage are registered


The borrower needs to visit the local sub-registrar to undertake the stamp duty process

The property buyer needs to buy his or her own stamp paper to execute the agreement

Stamp Duty Cost (%)

Nearly 5% of the home value or the loan amount

0.10-0.20% of the property home value or the loan amount


It is more expensive than equitable mortgage

It is less expensive than a registered mortgage

Risk factor

Low (since the government is involved)

High (as there is no government involvement)

Bank Rights

If the borrower defaults, the lender can do what it wants to with the property

In case the borrower defaults, the lender takes possession of the property and auctions it

How Is An Equitable Mortgage Created

An equitable mortgage on an immovable property is created through a written deed. The deed acts as proof that the mortgagor has deposited the title and deeds of his/her property with the mortgagee. The bank then notifies them with the intent to create security.

Is It Necessary To Register An Equitable Mortgage

An equitable mortgage will not incur any stamp duty. A registered mortgage will entail stamp duty based on the amount lent or amount for which charge has been created. This mortgage does not satisfy all the requirements of the legal mortgage as per the law in force but is nevertheless entered into as per agreement. It gives the necessary right to the mortgage to file suit for non-payment.

What Banks Prefer Equitable or Registered Mortgage

Banks mainly prefer registered mortgages because in equitable mortgages there are no records of the loan or the property in the sub-registrar’s office. This leaves the possibility of the property being sold to a third-party without fully repaying the loan. Hence, banks and many financial institutions consider registration to be equitable. Many fraud cases have also been registered when it comes to equitable mortgages.


With Bajaj Markets, applying for Home Loan is easy, quick, and completely hassle-free. Your home loan comes with a plethora of features and benefits that you can avail right from the comfort of your home. So apply today!

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