Mortgagor and mortgagee — two terms that sound almost identical but refer to opposite sides of a mortgage. Here is the simple breakdown.
Quick summary
| Term | Who | Simple Definition |
|---|---|---|
| Mortgagor | The borrower / homeowner | The person who takes out the mortgage |
| Mortgagee | The lender / bank | The institution that provides the mortgage funds |
Memory trick: Mortgagor = owner. Mortgagee = lender.
Roles and responsibilities
The mortgage contract creates specific obligations for both sides. The mortgagor must maintain the property and keep up with payments, while the mortgagee must provide funds, disclose all terms clearly, and follow legal processes for any enforcement. Here is what each party is responsible for.
Mortgagor (borrower)
| Responsibility | Details |
|---|---|
| Make mortgage payments | On time, every month, for the full term |
| Pay property taxes | Must keep taxes current — arrears can trigger default |
| Maintain home insurance | Lender requires continuous coverage |
| Maintain the property | Cannot let the property deteriorate (protects the lender’s security) |
| Comply with mortgage terms | No unauthorized changes to the property, no secondary financing without approval (if restricted) |
| Occupy the property | If the mortgage terms require owner-occupancy, must live there |
Mortgagee (lender)
| Responsibility | Details |
|---|---|
| Provide the mortgage funds | Advance the loan amount at closing |
| Disclose all terms | Interest rate, payment schedule, prepayment terms, penalties |
| Discharge the mortgage | Remove the charge from title once the mortgage is fully paid off |
| Provide mortgage statements | Annual and/or periodic statements showing balance, payments, interest |
| Follow legal processes | Must follow provincial law for any enforcement actions (power of sale, foreclosure) |
Rights comparison
While the mortgagor owns the property and has the right to live in, sell, or rent it, the mortgagee holds a registered charge on the title that protects their financial interest. This balance of rights is what makes a mortgage different from an unsecured loan — the lender has real recourse if you stop paying, but you retain full control of the property as long as you hold up your end of the contract.
| Right | Mortgagor (Borrower) | Mortgagee (Lender) |
|---|---|---|
| Occupy the property | ✅ Yes | ❌ No (unless foreclosure completed) |
| Sell the property | ✅ Yes (mortgage paid from proceeds) | ❌ Not unless default |
| Rent out the property | ✅ Yes (subject to mortgage terms) | ❌ No |
| Refinance | ✅ Yes (may involve penalty) | N/A |
| Prepay the mortgage | ✅ Yes (subject to prepayment terms) | N/A |
| Equity of redemption | ✅ Yes — right to pay off and clear the mortgage at any time | N/A |
| Register a charge on title | N/A | ✅ Yes — registered at the land registry |
| Power of sale / foreclosure | N/A | ✅ Yes — if mortgagor defaults |
| Receive payments | N/A | ✅ Yes — principal + interest per schedule |
What happens in default
Default is where the distinction between mortgagor and mortgagee matters most. The process varies by province — Ontario, BC, and most Atlantic provinces use a power of sale process (the lender sells the property), while Alberta and Saskatchewan use judicial foreclosure (the court transfers title to the lender). In either case, the mortgagor has a redemption period to catch up on payments and stop the process.
| Stage | What Happens | Who Acts |
|---|---|---|
| Missed payment | Late fee charged; lender contacts borrower | Mortgagee contacts mortgagor |
| Continued default (60–90 days) | Formal demand letter; acceleration clause may be triggered | Mortgagee issues demand to mortgagor |
| Power of sale notice (ON, BC, etc.) | Lender files notice; redemption period begins (35 days in Ontario) | Mortgagee files; mortgagor can pay to cure |
| Judicial foreclosure (AB, SK) | Lender asks court to transfer title | Court oversees the process |
| Redemption period | Mortgagor can pay the arrears (and costs) to stop the process | Mortgagor’s right to redeem |
| Sale or transfer | Property is sold (power of sale) or title transfers to lender (foreclosure) | Mortgagee recovers funds |
| Surplus funds | If sale price exceeds amount owed, surplus goes to the mortgagor | Mortgagor receives surplus |
| Deficiency | If sale price is less than amount owed, mortgagee may pursue mortgagor for the difference (varies by province) | Mortgagee may pursue; some provinces are non-recourse |
How the mortgage appears on title
When you buy a home with a mortgage, you are registered as the owner on the property title — but the lender’s mortgage charge is also registered. This charge gives the mortgagee legal standing to enforce the mortgage if you default. Once the mortgage is fully paid off, the lender files a discharge to remove the charge, and you hold clear title.
| Registration | Details |
|---|---|
| Property title | Registered in the mortgagor’s name (they are the owner) |
| Mortgage charge | Registered on title — shows the mortgagee has a security interest |
| Priority | First mortgage is usually the first registered charge — has priority in default |
| Discharge | When the mortgage is fully paid, the mortgagee files a discharge — removing the charge from title |
| Clear title | Title with no mortgage charge registered — the mortgagor owns the property free and clear |
Common scenarios
In practice, you will encounter the mortgagor/mortgagee distinction in several common situations. When refinancing, for example, your old mortgagee is discharged from title and a new mortgagee takes their place. When two people buy together, both are co-mortgagors and equally liable for the debt.
| Scenario | Mortgagor | Mortgagee |
|---|---|---|
| Buying a home | You (the buyer) | Your bank or credit union |
| Refinancing | You (the homeowner) | The new lender (old mortgagee is discharged) |
| Second mortgage | You | Second mortgagee (lower priority than first) |
| Co-signed mortgage | Both borrowers are co-mortgagors | The lender |
| Private mortgage | You (the borrower) | A private individual or company lending money |
| Mortgage fully paid | You (now with clear title) | Former mortgagee — no longer has any interest |
Related terms
Mortgage terminology can be confusing because many of these terms overlap. Here is a quick reference for related concepts you may see in your mortgage documents or on your property title.
| Term | Definition |
|---|---|
| Mortgage | The legal agreement pledging property as security for a loan |
| Charge | The registered interest the mortgagee has on the property title |
| Discharge | The legal document that removes the mortgage from title after full repayment |
| Equity of redemption | The mortgagor’s right to pay off the mortgage and recover full ownership |
| Power of sale | The mortgagee’s right to sell the property after default (used in ON, BC, NS, PEI, NB) |
| Foreclosure | Court-ordered transfer of title to the mortgagee (used in AB, SK) |
| Lien | A general term for a registered claim against property |
| Encumbrance | Any registered interest on title that restricts clear ownership |
| Collateral | The property pledged as security (in this case, the home) |
| Assignee | A third party the mortgage or charge is transferred to (e.g., when a lender sells the mortgage) |