chattel mortgage

law

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Last updated

June 24, 2026

Quick Summary

A chattel mortgage is a legal agreement where personal property, known as chattels, is used as collateral for a loan. Unlike a mortgage on real estate, a chattel mortgage applies to movable items such as vehicles, equipment, or inventory.12

In this arrangement, the borrower (mortgagor) retains possession of the chattels, but the lender (mortgagee) has a security interest. If the borrower defaults on the loan, the lender has the right to seize and sell the chattels to recover the debt. This type of mortgage is common in consumer credit transactions, though regulations exist to protect borrowers.2

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mortgage
History of the mortgage
…use of this so-called “chattel mortgage” was common throughout the Anglo-American world. The development of the law of chattel mortgages followed a course different from that of mortgages of land, but in most jurisdictions the end result was similar. The creditor’s rights normally do not come into play unless…
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…use of this so-called “chattel mortgage” was common throughout the Anglo-American world. The development of the law of chattel mortgages followed a course different from that of mortgages of land, but in most jurisdictions the end result was similar. The creditor’s rights normally do not come into play unless…
Read More

property law
Security interests in property
…interest in the creditor (chattel mortgage or conditional sale) or to have the creditor take possession of the property subject to the debtor’s right to redeem it by paying the debt (pledge or pawn). In some jurisdictions, notably England, the debtor will lease the property from the creditor (who…
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…interest in the creditor (chattel mortgage or conditional sale) or to have the creditor take possession of the property subject to the debtor’s right to redeem it by paying the debt (pledge or pawn). In some jurisdictions, notably England, the debtor will lease the property from the creditor (who…
Read More