A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.

The transferor is called a mortgagor, the transferee a mortagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed. [Section 58(a) of the Transfer of Property Act, 1882]

“Mortgage-deed” includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to, or in favour of, another a right over or in respect of specified property. [Section 2(17) of the Stamp Act, 1899]

A charge does not create any right in the property but only creates a right of payment out of the property specified. It is a jus ad rem, right to a right, as distinguished from a jus in rem, a right in respect of the thing itself. Whereas a mortgage is a transfer of an interest in immovable property, as a security for the loan, a charge is not a transfer of any interest in the property, though it nonetheless a security for payment of the amont. The right to recover the amount in question is not itself, immovable property. The right to have possession of the property can arise only if a specified interest is actually transferred which can be done by way of mortgage, whereas no such interest is transferred in favour of the charge-holder. [Muhammad Nawaz Khan vs. Muhammad Amin, (1969) 21 PLD (Lahore) 622]