A Deed of Real Estate Mortgage is the instrument Filipino borrowers and lenders use to secure a loan with titled land. The borrower (the mortgagor) does not give up ownership — they pledge the property as security, so that if the loan is not paid, the lender (the mortgagee) can foreclose and have the land sold to satisfy the debt. A properly drafted, notarized, and registered mortgage protects both sides: it gives the lender an enforceable lien with priority over later claims, and it fixes the borrower's obligations in clear, recordable terms. This guide explains what the deed must contain, its legal basis, and how foreclosure works.
What Is a Real Estate Mortgage?
A real estate mortgage is an accessory contract by which real property is made to answer for the fulfillment of a principal obligation, usually a loan. It is "accessory" because it depends on a principal obligation; if the loan is paid, the mortgage is extinguished. The mortgagor retains title and possession of the property and may even sell or further encumber it, subject to the existing mortgage. The mortgage attaches to the property itself — it follows the land into whoever's hands it passes once registered.
The mortgage must be recorded with the Registry of Deeds and annotated on the Transfer Certificate of Title to bind third parties. Upon the borrower's default, the lender may foreclose either judicially (through a court case) or extrajudicially (under Act No. 3135) if the deed grants a special power to sell.
When Do You Need a Real Estate Mortgage?
- Securing a private loan — an individual lends money and takes the borrower's land as security.
- Bank and financing loans — most housing and commercial loans require a registered real estate mortgage.
- Securing performance of an obligation — a mortgage can secure obligations other than a straight loan, such as a credit line or a contractor's undertaking.
- Restructuring or additional security — additional real property is pledged to support an existing obligation.
Legal Basis
- Civil Code Articles 2085–2092 (Mortgage in general) — Set the essential requisites of a mortgage: it must secure a principal obligation, the mortgagor must be the absolute owner with free disposal of the property, and the mortgage must be recorded to bind third persons.
- Civil Code Articles 2124–2131 (Real Estate Mortgage) — Govern mortgages over immovable property, including the rule (Art. 2126) that the mortgage directly subjects the property to the fulfillment of the obligation, and (Art. 2125) the requirement of registration to affect third parties.
- Act No. 3135, as amended by Act No. 4118 — Provides the procedure for extrajudicial foreclosure of real estate mortgages where the deed contains a special power of attorney to sell the property at public auction upon default.
- Property Registration Decree (PD 1529) — Governs registration and annotation of the mortgage on the certificate of title.
- 2004 Rules on Notarial Practice — A notarized deed is a public document; notarization is required for registration.
Required Elements of a Real Estate Mortgage
- Parties — full names, civil status, citizenship, and addresses of the mortgagor and mortgagee.
- The secured obligation — the principal amount (in words and figures), interest rate, payment term, and maturity date.
- Description of the property — the Transfer Certificate of Title number, issuing Registry of Deeds, area, location, and a technical or descriptive identification, with a warranty of clean title.
- Words of mortgage — that the mortgagor transfers and conveys the property by way of real estate mortgage to secure the obligation.
- Defeasance clause — that the mortgage becomes void upon full payment.
- Foreclosure / Act 3135 power — a special power of attorney authorizing extrajudicial foreclosure upon default.
- Attorney's fees and costs in case of foreclosure or litigation.
- Registration clause — agreement to register and annotate the mortgage, with expenses for the mortgagor's account.
- Release clause, date and place, signatures, and a notarial acknowledgment block.
Sample Deed of Real Estate Mortgage
Below is a representative excerpt of what a Deed of Real Estate Mortgage looks like. Use Legalia Pro to generate a complete, notary-ready version with your own parties, loan terms, and property details filled in.
This Deed of Real Estate Mortgage is made and executed by and between:
Juan Dela Cruz, of legal age, Filipino, single, and a resident of 123 Mabuhay Street, Barangay San Antonio, Quezon City, hereinafter referred to as the Mortgagor;
— and —
Maria Santos, of legal age, Filipino, single, and a resident of 456 Mabini Street, Barangay Poblacion, Makati City, hereinafter referred to as the Mortgagee;
WITNESSETH: That —
1. That the Mortgagor is justly indebted to the Mortgagee in the principal sum of Five Hundred Thousand Pesos (500,000.00), Philippine currency, with interest at the rate of 6% per annum, payable in twelve (12) equal monthly installments, the whole of which obligation shall mature and become due and demandable on June 3, 2027.
2. That the Mortgagor is the absolute and registered owner of a parcel of land covered by Transfer Certificate of Title No. T-123456 issued by the Registry of Deeds of Quezon City, with an area of 200 square meters, more or less, situated at Barangay Kapitolyo, Pasig City, more particularly described as follows: a parcel of residential land, Lot 5, Block 12 of the consolidation-subdivision plan, situated in Pasig City. The Mortgagor warrants that the foregoing property is registered in the Mortgagor's name, free from all liens and encumbrances except as expressly disclosed herein, and that the Mortgagor has full right and authority to mortgage the same.
Together with all the buildings and improvements existing thereon, consisting of a two-storey residential building.
3. That to secure the full and faithful payment of the foregoing obligation, the Mortgagor does hereby TRANSFER and CONVEY by way of REAL ESTATE MORTGAGE unto the Mortgagee, its/his/her heirs, successors, and assigns, the above-described property together with all the improvements thereon.
4. That this mortgage shall be null and void upon the full payment of the obligation hereby secured; otherwise, it shall remain in full force and effect and shall be enforceable in the manner provided by law.
5. That in the event the Mortgagor fails to pay the obligation in whole or in part upon maturity, and subject to the requirements of law, the Mortgagee may foreclose this mortgage judicially or extrajudicially in accordance with Act No. 3135, as amended, and for this purpose the Mortgagor hereby appoints the Mortgagee as its/his/her attorney-in-fact, with full power and authority to cause the sale of the mortgaged property at public auction in accordance with law and to apply the proceeds thereof to the secured obligation.
6. That in case of foreclosure or any litigation arising from or in connection with this mortgage, the Mortgagor shall pay the Mortgagee attorney's fees equivalent to 25% of the total outstanding obligation, plus the costs of suit and the expenses of foreclosure.
7. That this Real Estate Mortgage shall be registered with the appropriate Registry of Deeds and annotated on the certificate of title covering the mortgaged property. All registration fees, documentary stamp taxes, notarial fees, and other expenses related to the execution and registration of this mortgage shall be for the account of the Mortgagor, unless otherwise agreed in writing.
8. That upon full payment and satisfaction of the obligation hereby secured, the Mortgagee shall execute the necessary release, cancellation, or discharge of this mortgage, and the Mortgagor may cause the cancellation of the mortgage annotation with the Registry of Deeds at the Mortgagor's expense, unless otherwise agreed.
IN WITNESS WHEREOF, the parties have hereunto signed this Deed of Real Estate Mortgage on June 3, 2026 at Quezon City, Philippines.
BEFORE ME, a Notary Public for and in the above jurisdiction, this June 3, 2026, personally appeared:
| Name | Competent Evidence of Identity |
|---|---|
| JUAN DELA CRUZ | Philippine Passport No. P1234567A |
| MARIA SANTOS | Philippine Passport No. P7654321B |
known to me and to me known to be the same persons who executed the foregoing instrument, and they acknowledged to me that the same is their free and voluntary act and deed.
WITNESS MY HAND AND SEAL on the date and at the place first above written.
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Subscribe to Pro — Generate NowHow to Draft a Real Estate Mortgage
- Identify the parties and the loan. State the mortgagor's and mortgagee's full circumstances, then the principal amount, interest, term, and maturity date of the secured obligation.
- Describe the property precisely. Use the TCT number, issuing Registry of Deeds, area, location, and technical description exactly as they appear on the title, and warrant clean title.
- Insert the words of mortgage and the defeasance clause — conveying the property by way of mortgage to secure the obligation, void upon full payment.
- Grant the Act 3135 foreclosure power. Include the special power of attorney authorizing extrajudicial foreclosure on default — this is what allows foreclosure without a court case.
- Add attorney's-fees, registration, and release clauses. Fix the percentage for fees, assign registration expenses, and provide for release on full payment.
- Execute, notarize, and register. Sign before a notary public, then register the mortgage with the Registry of Deeds so it binds third parties and is annotated on the title.