The transfer of the ownership of an asset by way of security for particular obligations on the express or implied condition that it will be re-transferred on the discharge of the secured obligations.

A legal mortgage is the most secure and comprehensive form of security interest. It transfers legal title to the Mortgagee and prevents the mortgagor from dealing with the mortgaged asset while it is subject to the mortgage. However, legislation has affected the characteristics of a legal mortgage over land. As a result of the Law of Property Act 1925, a legal mortgage over land is now normally created by a document creating a "charge by deed expressed to be by way of legal mortgage" rather than by the mortgagor transferring the legal title to the land to the mortgagee. Even though title is not transferred to the mortgagee (as it is with a mortgage of other assets), this type of security interest gives the mortgagee equivalent rights.

An equitable mortgage arises where the formalities to create a legal mortgage have not been completed or where the asset being mortgaged is only an equitable interest. An equitable mortgage only transfers a beneficial interest in the asset to the mortgagee with legal title remaining with the mortgagor.

For more information on mortgages generally, see Practice note, Taking security and for more information on mortgages over land, see Practice note, Taking security over freehold and leasehold property.