Mortgages

Study notes

A mortgage is security for a loan, not a transfer of the borrower’s ownership. This section distinguishes legal from equitable mortgages and sets out each side’s rights on default.

What you must know

• The mortgagor keeps ownership and possession; the mortgagee holds a security interest repayable on redemption.
• A legal mortgage is created by registration; an equitable mortgage arises from depositing title deeds (or an agreement to do so).
• The mortgagor’s core right is redemption — repaying the loan to free the property; clauses that unfairly block redemption (clogs) are not allowed.
• On default the mortgagee may sue, appoint a receiver, foreclose, or exercise the power of sale — the power of sale arises only when the statutory conditions are met and notice served.
• Loan-to-value (LTV) limits cap how much a lender may lend against the property’s value or price, whichever is lower — the binding constraint on buyers’ cash and CPF planning.
• Where several mortgages exist, priority generally follows the order of registration.