Difference between Mortgagee and Mortgagor

Date: 16-January,2021Last Updated: 17-April,2021
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To know the difference between a mortgagor and a mortgagee, we'll first have to know what Mortgage, Mortgagee, and Mortgagor are. This could be helpful when you are looking forward to buying a residence.

What is a mortgage?

To enable a person to purchase a home or property, a lender or a bank provides a loan called a mortgage. A loan for 80% of the home value is more common than acquiring a loan to cover the entire cost of a home. The loan has to be repaid in the given period. The purchased home acts as a security for the lender to get their money back.

There are two types of mortgages, a fixed-rate mortgage, and an adjustable-rate mortgage.

  • Fixed-rate Mortgage:

Fixed-rate mortgages provide the borrowers with a fixed interest throughout their tenure. The typically set term to pay back the loan is 15, 20, or 30 years.

The fixed-rate makes it easier for the borrower to decide the tenure for repaying the loan. If the term is short, the amount paid with interest is higher, and conversely, the longer the term of payment, the smaller the amount that needs to be paid back.

The main advantage of a Fixed-rate Mortgage is that the borrower has to pay the same amount for the rest of the term. Even changes in the market prices cannot influence the terms.

  • Adjustable-rate Mortgage:

Adjustable-rate mortgages provide borrowers with interest rates that can change over the term. It is popular because the starting rates of interest are low, despite making it difficult for the borrower to manage spending money accordingly.

Increases in market prices influence the change in the rate of interest, which changes the amount of interest that must be paid by the borrower. With this type of mortgage, the interest rate is set to change at specific times during the loan term. Typically, the change takes place once every year or every six months.

difference between mortgagor and mortgagee

What is a mortgagee?

A bank, an institution, or an individual who lends a secured loan that will help with the loan amount to the borrower in exchange for the security of property, who later receives installment of payments over given intervals of the loan period is called a Mortgagee.

They provide home financing for buyers. Usually, over different countries and states, the mortgagees work with numerous borrowers at the same time on a yearly basis. They accordingly develop a lending package and measure the amount of financial risk related to the potential Mortgagor.

What is a mortgagor?

An organization or an individual who borrows a loan in order to finance a home purchase is called a Mortgagor. They get to decide the period of the payback period of the loan. In order to secure the most favorable terms between the Mortgagor and the Mortgagee, the mortgagors can pay up to 20 percent of the home's price as a down payment or security.

The Mortgagor mainly acquires a loan by mortgaging their assets that might interest the Mortgagee. They pay the interest as well as an installment on equal intervals of time, which could be monthly, quarterly, or half-yearly. Unless the loan is repaid, the ownership of the property or the assets remains with the Mortgagee. They also get to decide the amount and tenure of the loan.

The most prominent differences between Mortgagee and Mortgagor.


In simple terms, a mortgagee is the lender of money, and a mortgagor is a borrower.

  • The Mortgagee is an organization or an individual who is interested in the business of granting loans in exchange for security assets.
  • A mortgagor is an individual who requires a loan in exchange for personal assets that hold immense value. They also pay the installments throughout fixed time.


  • The documents concerned with the assets should be submitted by the Mortgagor to the Mortgagee at the agreement's time.
  • The Mortgagor should make sure that the loan amount they have received should be documented in the form of a receipt or an agreement for future references and security reasons.

Payment Terms:

  • The Mortgagee accepts the installments on a monthly and quarterly basis as agreed with the Mortgagor.
  • The Mortgagor pays the agreed amount on the agreed monthly or quarterly period to repay the borrowed loan.


The agreement is the most essential part of the process of the loan. It may involve a lot of disagreement as well as negotiation.

  • The rate of interest and the terms of payment are determined by the Mortgagee.
  • The tenure, the amount of loan, and the choice of assets are decided by the Mortgagor.


  • Till the whole amount of the loan is paid back with interest, the ownership of the security asset remains with the Mortgagee.
  • While the ownership of the asset remains with the Mortgagee, the borrowed money remains with the Mortgagor. Once the amount is paid back, the ownership of the asset also remains under the Mortgagor.


  • An equal amount of money is received by the Mortgagee for a fixed period, i.e., monthly or quarterly.
  • The Mortgagor pays an equal amount of money inclusive of interest on a monthly or quarterly period.

Some notable points and differences between Mortgagee and Mortgagor.

  • The word 'Mortgage' implies security or a real estate asset that can be pledged to get a secured loan. Both Mortgagee and Mortgagor are related to the term ' Mortgage.'
  • The term 'Lender' is referred to as Mortgagee, and the receiver is referred to as Mortgagor.
  • Along with interest, the principal amount is divided into equal installments to fit the tenure. The Mortgagor pays the calculated amount on the fixed time, and the Mortgagee receives it.
  • The Mortgagee has to answer all the required questions by the Mortgagor related to the agreement.
  • The Mortgagee has also the right to sell the security asset if the Mortgagor fails to pay back the debt.
  • The collateral amount is usually higher than the debt. The Mortgagee holds a higher amount of assets, whereas the Mortgagor holds a lower amount of assets and a principal loan.

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