Mere Mortgage

Definition "Mere Mortgage"

A "Mere Mortgage" (Mere Equity in legal terminology) is a type of equitable interest, but a form of interest that will rank lower in priority to the more usual type of equitable interest, even if the mere equity was created prior in time. A lender holds a mere equity in circumstances where the person holds an equitable interest of a type that requires a court of equity to intervene to perfect in some way the holder's title to that equitable interest. As this is a difficult concept to understand, it is necessary to consult a solicitor.

There is a common misconception that a Mere Mortgage is a new type of loan, when in fact it is a lenders failed attempt to draft a mortgage memorandum, which requires the courts rectification.

The concept of the subordinated status of a mere equity was addressed in the High Court decission of Latec Investments v Hotel Terrigal (1965). The three judgments delivered in that case varied in their reasonings, but the judges agreed as to the resulting priorities.

In Summary:

A "Mere Mortgage" is a form of imperfect security which requires rectification by a court. It is not a loan product.

If you require any further information please do not hesitate to contact our team on 1300 361 883.