A mortgage is a temporary transfer of property in order to secure a loan of money. The person who owns the land is the 'mortgagor'. The person lending the money is the 'mortgagee'.
Both freehold and copyhold land could be mortgaged. This section is concerned with the mortgage of freehold land. Copyhold mortgages were recorded in the manorial court rolls. However, 'covenants to surrender' copyhold property in manorial courts for this purpose appeared in freehold mortgage deeds if the mortgaged estate was made up of both types of land.
From the seventeenth century up to 1925, there were two main ways in which a mortgage could be arranged: by demise, or by conveyance.
Although the wording of some mortgage deeds might suggest that the mortgagee took possession of the property until the money was repaid, this was not usually the case in reality. In the seventeenth century it was established in law that the mortgagor would remain living in the property or administering the mortgaged estate. It was normally only if the mortgagor failed to pay the annual interest that the mortgagee could begin to take action to recover the debt. It was also accepted that the mortgagor retained a right to redeem the property whenever he paid the money, even after the period of time when the mortgagee had foreclosed and begun to take possession. This was called the mortgagor's 'equity of redemption' and shows that a mortgage was primarily a way of raising money (for the mortgagor) and investing money at interest (for the mortgagee), rather than a means of gaining possession of land.
In this section, the main types of mortgage deeds are explained in detail.
Next page: Mortgage by demise
