Equitable Mortgages

Definition "Equitable Mortgages"

An unregistered mortgage differs from a registered mortgage because it is not a charge on the land. Instead it relies on the fact it represents a promise by the borrower to reserve the relevant euity in the property for the lender when the property is sold. It is possible to have unregistered mortgages which are not protected by caveat.

Whether an unregistered mortgage has been noted on title through the lodgment of a caveat or not, it is also known as an "Equitable Mortgage" because it is enforced only though the principles of equity.

There is a common misconception that an unregistered mortgage must first be registered before it can be enforced. This is not the case. Enforcement proceedings are brought in the Equity Division of the Supreme Court and default judgment is by way of Notice of Motion.

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