Part II Description of Interests, 6 Non-Possessory Security
Hugh Beale, Michael Bridge, Louise Gullifer, Eva Lomnicka
- Mortgage — Debt — Equity
This chapter analyses the nature of mortgage. It is a non-possessory security whereby the mortgagor transfers ownership to the mortgagee subject to an obligation to retransfer ownership on satisfaction of the underlying obligation. Since equity will enforce the retransfer, the right to it is not personal but amounts to an equitable interest called the equity of redemption. The actual right to redeem can be a legal right, arising expressly from the contract of mortgage: if that legal right to redeem is not exercised, an equitable right to redeem arises. However, since equity will enforce even the legal right to redeem against third parties, the mortgagor has an equitable interest called the ‘equity of redemption’ from the commencement of the mortgage.