English Mortgage Deed explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
An English mortgage has two features that no other kind combines: the borrower promises personally to repay on a fixed date, and the property is transferred absolutely to the lender, subject to a proviso that the lender will re-transfer it when the money is paid. This article gives a specimen deed and explains how the lender's power of sale works.
The deed contains a covenant to repay on a certain date, an absolute transfer of the property and a proviso for re-transfer on repayment. Section 58(e) of the Transfer of Property Act, 1882 defines it. A mortgagee's power to sell without going to court under section 69 arises only in the cases the section lists; do not assume it, and draft a remedy by suit for sale where it does not apply. The deed is registered, signed by the mortgagor and attested by at least two witnesses.
When you need an English mortgage
You use it when the lender wants certainty about the date for repayment and a transfer of title as security. The mortgagor binds himself to repay the mortgage-money on a certain date and transfers the property absolutely, subject to the proviso. Its characteristics:
- a personal covenant to repay on a certain date;
- an absolute transfer of the mortgaged property to the mortgagee;
- a proviso to re-transfer on payment as agreed;
- the lender knows with certainty when the borrower is to redeem or the lender may proceed to foreclose or sell.
Compare it with the mortgage by conditional sale, where the sale is ostensible and the condition is the central term, and with a simple mortgage, where possession stays with the borrower. If you need help choosing and drafting the right security, our loan documentation support team can assist.
Specimen deed
DEED OF ENGLISH MORTGAGE This Deed of Mortgage is made on at BETWEEN , (the Mortgagor) AND , (the Mortgagee). RECITALS A. The Mortgagor is the owner of the property described in the Schedule (the Mortgaged Property). B. The Mortgagor has asked the Mortgagee for a loan of for , and the Mortgagee has agreed on the terms of this deed. NOW THIS DEED WITNESSETH AS FOLLOWS: 1. Loan and covenant to repay. The Mortgagor acknowledges receipt of (the Mortgage Money) and covenants to pay the Mortgagee the Mortgage Money on , with interest at per annum from the date of this deed, the interest to be paid on . 2. Transfer. As security for the Mortgage Money and interest, the Mortgagor transfers the Mortgaged Property absolutely to the Mortgagee, with all buildings, fixtures, easements and appurtenances, to hold to the Mortgagee, subject to clause 3. 3. Proviso for re-transfer. On payment of the Mortgage Money and interest on the due date in the manner stated, the Mortgagee shall re-transfer the Mortgaged Property to the Mortgagor, hand over this deed and all title documents in its possession, and execute and register such re-transfer at the Mortgagor's cost. 4. Title. The Mortgagor confirms that it has absolute title and full power to transfer the Mortgaged Property, which is clear of all encumbrances, charges and claims, and that it will at its cost do whatever further acts the Mortgagee reasonably requires to assure the title during the continuance of the security. 5. Default and remedies. If the Mortgagor fails to pay the principal on the due date, or fails to pay instalments of interest, whether demanded or not, the Mortgagee may . 6. Power of sale. requiring payment, as provided in section 69 of the Transfer of Property Act, 1882. Delete this clause if the section does not apply to the parties.] 7. Insurance and outgoings. The Mortgagor shall keep the buildings insured for and shall pay all taxes and public charges on time. 8. Costs. Stamp duty, registration charges and related expenses shall be borne by . IN WITNESS WHEREOF the parties have signed this deed on the date first written above. Signed by the Mortgagor: Signed by the Mortgagee: Witnesses: 1. 2. SCHEDULE: DESCRIPTION OF THE MORTGAGED PROPERTY
Clause-by-clause explanation
| Clause | What it does | Drafting tip |
|---|---|---|
| Parties and recitals | Identify the parties and the loan | A company should record the authority to borrow and mortgage |
| 1 Covenant | The personal promise to repay on a fixed date | State the date, rate and interest dates in figures |
| 2 Transfer | Absolute transfer of the property | Describe it exactly in the Schedule |
| 3 Proviso | Re-transfer on payment | This proviso is what makes it a mortgage, not a sale |
| 4 Title and further assurance | Mortgagor's warranties | Cross-check with the title search |
| 5 Default | Triggers for the lender's remedies | Keep the default events objective |
| 6 Power of sale | Sale without court | Include it only where section 69 permits |
| 7 Insurance and outgoings | Protects the security | Name the insured sum |
| 8 Costs | Allocates stamp and registration | Say who pays |
The law behind it
Section 58(e). Where the mortgagor binds himself to repay the mortgage-money on a certain date and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is an English mortgage. See the six kinds of mortgage.
Section 69. A mortgagee has power to sell the property in default of payment without the intervention of the court only in the cases the section lists: (a) an English mortgage where neither party is a Hindu, Muhammadan or Buddhist or a member of any other race, sect, tribe or class specified by the State Government in the Official Gazette; (b) where the mortgage-deed expressly confers a power of sale without court and the mortgagee is the Government; and (c) where the deed expressly confers it and the property is situate within the towns the section names or any other town or area the State Government notifies. The power cannot be exercised unless written notice requiring payment of the principal has been served and default has continued for three months, or interest of at least the amount the section states has been in arrear and unpaid for three months after becoming due. Because the power of sale is so limited, many English mortgage deeds provide for a suit for sale and a receiver as in clause 5. Read the mortgagee's power of sale under section 69.
Section 59. Where the principal money secured is one hundred rupees or upwards, the mortgage is made only by a registered instrument signed by the mortgagor and attested by at least two witnesses: how a mortgage is made.
Stamp duty, registration and execution
The deed is a chargeable mortgage instrument. The duty is fixed by the Stamp Act and Schedule of the State where it is executed; see stamp duty on a mortgage deed. It must be registered under the Registration Act, 1908 as section 59 requires; see compulsory registration under section 17. Execution: both parties sign before two attesting witnesses, a company signs by an authorised person under a board resolution, the deed is stamped, and presented for registration with identity proofs.
Variations
- Where a power of sale is not available: delete clause 6 and keep the suit for sale.
- Interest instalments: replace the monthly payment with the schedule agreed between the parties.
- Company mortgagor: check the board and shareholder approvals required for creating security, and the filings for the charge.
Common mistakes
- Using the form for a case where neither party is within the classes that section 69(a) names, and assuming a power of sale exists.
- Leaving out the personal covenant to repay or the fixed date.
- Describing the transfer as outright sale with no proviso for re-transfer.
- Forgetting that the written notice and the three-month default period must run before any power of sale is exercised.
- Not registering the deed or not having two attesting witnesses.
- Failing to deliver the title documents back on redemption.
- Vague default triggers.
- No clause on insurance of the buildings.
Need help with an English mortgage?
An English mortgage needs the covenant, the transfer and the proviso to fit together, and the remedies to match what the law allows. Our loan documentation support service can prepare the deed and the related title and registration steps.
Key takeaways
- An English mortgage combines a personal covenant to repay with an absolute transfer and a proviso for re-transfer.
- Power of sale without court arises only in the cases that section 69 lists.
- Register the deed; two attesting witnesses are needed.
- State stamp law fixes the duty.
- Compare with a conditional sale mortgage before choosing.
Read next
- Deed of mortgage by conditional sale: format
- Usufructuary mortgage deed: format
- Memorandum of deposit of title deeds: format
- Mortgagee's power of sale: section 69
Disclaimer: This specimen is a general model for information. Every document must be adapted to its facts and to the law, rules and forms in force when it is signed or filed; stamp duty, registration and court fees depend on the State and the forum. This article is general information, not legal advice; check the official text before acting.