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Does Mortgage by Deposit of Title Deed Require Registration?

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The requirement to register a mortgage created by deposit of title deed (also known as an equitable mortgage) depends primarily on the lending bank’s internal policies and the sanctioned loan amount. PUBLIC SECTOR BANKS – MANDATORY REGISTRATION Based on our experience, most public sector banks insist on registering the mortgage at the local sub-registrar’s office irrespective of the loan amount. Here are some of the prominent public sector banks that commonly require mortgage registration:
  • State Bank of India (SBI)
  • Indian Bank
  • Canara Bank
  • Punjab National Bank
  • Bank of Baroda
  • Bank of Maharashtra
  • Central Bank of India
The borrower is responsible for bearing the applicable stamp duty and registration charges, which are calculated based on the sanctioned loan amount. For instance, one of our clients availed a home loan of ₹85 lakhs from SBI for a property purchase in Bangalore. The mortgage registration charges paid were as follows:
  • Stamp Duty: 0.5% of the loan amount Rs.42,500
  • Registration Fee: 0.1% of the loan amount Rs.8,500
  • Total Cost: Rs.51,000
Here is an excerpt of the registered “Deposit of Title Deed” for reference: MODT Despite requesting SBI to waive the registration requirement, the bank insisted on completing the process. In our experience, public sector banks seldom allow the borrower to skip mortgage registration.
PRIVATE SECTOR BANKS – CONDITIONAL OR NO REGISTRATION In contrast, many private sector banks and housing finance companies require mortgage registration only if the loan amount exceeds Rs.1 crore. Based on our personal case handling, the following lenders have not mandated mortgage registration for loans below ₹1 crore:
  • HDFC Bank Ltd
  • ICICI Bank Ltd
  • Axis Bank Ltd
  • LIC Housing Finance Ltd
In such cases, these institutions retain the title documents as collateral but do not register the mortgage. As a result, the mortgage does not appear in the property’s Encumbrance Certificate (EC).
WHY DO SOME BORROWERS INTENTIONALLY AVOID REGISTRATION? Some borrowers may consciously avoid mortgage registration for the following reasons:
  • Cost Saving – To avoid paying stamp duty and registration fees.
  • Privacy – Since an unregistered mortgage does not reflect in the Encumbrance Certificate, the loan remains out of public records.
CONCLUSION Whether or not mortgage registration is required depends on three main factors:
  1. The bank or lending institution you choose,
  2. The loan amount, and
  3. The internal policy of the lender.
  • Public sector banks typically mandate mortgage registration.
  • Private sector banks may waive registration for loan amounts below Rs.1 crore.
  • For loans above Rs.1 crore, registration is almost always required regardless of the lender.
If you require assistance or would like to consult on your specific case, write to us:
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