Mortgagor vs Mortgagee: 5 Key Differences You Need to Know

If you’ve ever taken out a mortgage, or even just started looking into one, you’ve probably come across the terms mortgagor and mortgagee. And let’s be honest: they sound confusingly similar.

But knowing the difference between these two roles can make the whole mortgage process feel a lot less intimidating. So let’s break it down.

First Things First: What Do These Words Mean?

Here’s the simplest way to remember it:

• The mortgagor is you, the person borrowing the money.
• The mortgagee is the lender, the bank or credit union giving you the loan.

Think of it like this: The mortgagor gives the mortgage (or promise to repay), and the mortgagee receives it.

What Does a Mortgagor Do?

The mortgagor is the one applying for a mortgage to buy or refinance a home. If you’re the buyer, you’re the mortgagor.

As the mortgagor, you agree to:

• Make monthly payments on the loan
• Keep up with property taxes and insurance
• Use the home according to the terms of the loan (usually as your primary residence)
• Allow the lender to take the home if you stop making payments (that’s the collateral part)

In other words, you get the keys to the house, but the lender gets a legal interest in it until the loan is paid off.

What Does a Mortgagee Do?

The mortgagee is the lender, the one supplying the money so you can buy the home. That might be a bank, credit union, or mortgage company.

Their responsibilities include:

• Giving you the funds to purchase the property
• Holding a lien on the home until the loan is fully repaid
• Collecting your monthly payments (or working with a loan servicer who does)
• Enforcing the terms of the loan if something goes wrong (like missed payments)

So while you live in and maintain the home, the mortgagee holds legal leverage until your debt is settled.

Mortgagor vs Mortgagee: A Quick Comparison

Why It Matters

You might think, "Do I really need to know these terms?" Honestly, yes.

Understanding the difference between mortgagor and mortgagee helps when you're:

• Signing legal mortgage documents
• Reading your loan terms
• Talking to your lender or mortgage broker
• Trying to understand your rights and responsibilities as a homeowner

Even though these words are mostly used in formal documents, it’s smart to know who’s who, especially when your home and finances are on the line.

Final Thoughts

The bottom line? The mortgagor is the borrower, you. The mortgagee is the lender, your bank or credit union. It’s that simple.

These terms might feel like legal jargon, but once you know what they mean, they give you a better understanding of how mortgages actually work. And when it comes to big financial decisions like buying a home, a little clarity goes a long way.

FAQs About Mortgagor vs Mortgagee

1. Is the mortgagor always the homeowner?

Yes, if you’re buying the home and taking out a loan, you’re both the mortgagor and the homeowner.

2. Can someone be both the mortgagor and mortgagee?

Not in a traditional mortgage. The roles are always on opposite sides: one borrows, one lends. In rare private or seller-financed deals, a seller might act as a lender, but they’re still technically the mortgagee.

3. What happens if the mortgagor defaults?

If the mortgagor stops paying, the mortgagee has the right to foreclose, meaning they can take ownership of the home and sell it to recover the unpaid loan balance.

4. What’s the easiest way to remember the difference between mortgagor and mortgagee?

Think of it this way: the mortgagor is the one who gives the mortgage (the borrower), and the mortgagee is the one who receives it (the lender). You = mortgagor. Bank = mortgagee.

5. Do the terms “Mortgagor vs Mortgagee” appear on my loan documents?

Yes. “Mortgagor” and “mortgagee” often show up in your mortgage agreement, promissory note, and other legal paperwork. It’s helpful to know what they mean before signing anything.