MORTGAGE

A mortgage is a contract between the lender (mortgagee), and the borrower(mortgagor) whereby the mortgagor’s property becomes security for money lent by the mortgagee. The debt becomes a charge over the real estate.

See:
legal mortgage
equitable mortgage.

Because land cannot be destroyed or lost and not easily damaged it is good security for money borrowed. For this reason the housing loans have the lowest lending rate. The charge over land has priority against other creditors of the mortgagor and the first mortgagee has priority over the second mortgagee.

A disadvantage of real estate as security is that it is illiquid. That is it cannot be quickly converted into cash.

The mortgage is a statutory charge or security only and not a transfer of land. The mortgage confers an interest but no estate and the mortgage charge is created upon registration of the mortgage on the certificate of title.

An unregistered mortgage is enforced as an equitable mortgage.

See:
second and subsequent mortgages