It depends on the bank
As per my observation, most public sector banks register mortgages in sub-registrar office
Listing the few prominent public sector banks for your reference:
- State Bank of India
- Indian Bank
- Canara Bank
- Punjab National Bank
- Bank of Baroda
- Bank of Maharashtra
- Central Bank of India
The borrower must pay the required stamp duty and registration fee for registration of mortgage in sub-registrar office
One of my client took home loan of Rs.85 lakh from SBI for a property in Bangalore. We paid the following cost for registration of mortgage in sub-registrar office
- The stamp Duty is 0.5% of loan amount (Rs. 42,500)
- The registration fee is 0.1% of loan amount (Rs. 8500)
The total cost is Rs. 51,000/-
Below is the image of our registered “Deposit of Title Deed”:
We requested the SBI to ignore our mortgage registration but SBI mandated us to register, we may not able to skip mortgage registration with most public sector banks.
Most of the private sector banks do not register mortgages in sub-registrar office unless it is imperative
Based on my personal experience, we avoided mortgage registration with following banks and financing company
- HDFC Bank Ltd
- ICICI Bank Ltd
- Axis Bank Ltd
- LIC Housing Finance
They only collect the title documents as security and don’t register mortgages in sub-registrar office. An unregistered mortgage is not reflected in encumbrance certificate.
Few borrowers may intentionally ignore mortgage registration for two main reasons:
- Hedging the cost (ignoring stamp duty and registration fee)
- Loan data is not stored in public records like encumbrance certificate (borrower may intend to keep the data private)
To answer your question, the mortgage registration depends on the bank you choose. Some banks are mandated and some are not.
If the loan amount is less, you may opt for “Overdraft” facility. The borrowers do not need to submit title documents as security with bank and not required to register mortgage in sub-registrar office. You need to maintain decent balance in your savings account as security.
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