MODT: The Mortgage Charge on Your Bengaluru Home Loan

A Bengaluru buyer budgeting for a 50 lakh home loan in 2026 had the down payment, the stamp duty, and the registration fee all worked out, then got handed one more line at the loan desk: about 30,000 rupees for MODT. It was not a scam or a hidden markup, it was a legal charge for recording the bank's mortgage on the property, and almost no first time buyer sees it coming. On a larger loan it is larger still, because Karnataka puts no ceiling on it. Knowing about MODT before you sign keeps this from being the surprise that dents your closing budget at the very last moment.

The short answer. MODT, the Memorandum of Deposit of Title Deeds, is the document that records the bank's mortgage when you take a home loan, and in Karnataka it costs roughly 0.6 percent of the sanctioned loan, about 0.5 percent stamp duty plus 0.1 percent registration. The trade off to note: Karnataka sets no maximum cap, so the charge scales straight up with the loan size, and it must be registered soon after sanction, which is why a buyer should budget for it from the start rather than discover it at closing.

What is MODT, and why does the bank need it?

MODT is the record of an equitable mortgage, the way your home loan lender secures its claim on the property. When you deposit your title documents with the bank as security for the loan, the bank records that arrangement through a Memorandum of Deposit of Title Deeds. You keep ownership of the flat, but the lender holds a legal charge over it until the loan is repaid. The bank needs this because it turns your promise to repay into an enforceable security interest, and because registering it makes the mortgage part of the public record. Without MODT, the bank's claim would be harder to prove and enforce, which is why lenders treat it as a standard, non negotiable part of the loan. It is worth being clear that MODT is not a fee the bank pockets. The bulk of it is government stamp duty and registration, paid to the state for recording the mortgage, which is also why the amount tracks the loan size rather than the bank's discretion. Understanding that keeps you from arguing the wrong point at the loan desk.

How much does MODT cost in Karnataka?

It works out to roughly 0.6 percent of your sanctioned loan amount, and Karnataka does not cap it. The charge is made up of a stamp duty component of about 0.5 percent and a registration component of about 0.1 percent, both calculated on the loan sanctioned, not the property value. On a 50 lakh loan that is around 30,000 rupees, plus small scanning and service fees. The table breaks it down so you can size it for your own loan.

Because there is no cap, a 1 crore loan roughly doubles the MODT to around 60,000, which is why higher value Bengaluru buyers should not treat it as a rounding error. This sits alongside the state charges on the purchase itself, which we cover in our guide to Karnataka stamp duty and registration. Confirm the exact current percentages with your lender or the sub registrar before you finalise, since these are the figures to budget around.

Is MODT compulsory, and when must it be registered?

For a registered mortgage it is effectively compulsory, and it has to be registered promptly after sanction. Lenders in Karnataka treat MODT as a standard step in disbursing a home loan, so you should assume it applies to your loan. It also needs to be registered within a set window after the loan is sanctioned, commonly cited as four months, and missing that window can attract penalties. For a buyer, the practical takeaways are simple: expect the charge, budget for it well upfront, and make sure the registration is done on time so you do not inherit a penalty. Ask your lender to confirm the exact deadline and who handles the registration, because in practice the bank usually coordinates it. Some lenders collect the MODT amount upfront and register it on your behalf, while others ask you to arrange it, so clarify the process early. Either way the cost is yours, and it is cleaner to have it itemised in writing than to find it deducted quietly from your first disbursement.

How does MODT show up when you later sell, or buy resale?

It appears in the Encumbrance Certificate, which is exactly how a mortgage becomes visible to a future buyer. Because MODT is registered, the loan charge is recorded publicly and shows up in the property's Encumbrance Certificate, the document that lists registered transactions and charges on a property. This matters in two directions. If you are buying a resale flat, an outstanding MODT in the Encumbrance Certificate tells you the property is still mortgaged, and you need to see it cleared. If you have repaid your own loan, you must ensure the charge is formally released so your Encumbrance Certificate shows a clean title. We explain reading that document in our guide to the Encumbrance Certificate search.

Releasing the charge is its own small step, and one buyers often forget after clearing a loan. When the loan is repaid, the bank issues a discharge, and getting that reflected in the Encumbrance Certificate may involve a nominal fee and a short wait. Skipping it leaves your record showing a mortgage that no longer exists, which becomes your problem the day you try to sell. Treat the release as the final act of the loan, not an optional afterthought, so your title reads clean when it matters most.

What must a resale buyer check about MODT?

You must confirm the seller's loan is closed and the mortgage formally discharged before you pay. A resale flat that carried a home loan will show that mortgage in its records, and buying it without the charge being released means buying a property the bank still has a claim on. The checklist below keeps you safe.

1. Pull a recent Encumbrance Certificate and look for any registered mortgage or MODT entry.
2. If the seller had a loan, ask for the bank's loan closure statement confirming full repayment.
3. Obtain the deed of discharge or reconveyance that formally releases the bank's charge.
4. Confirm the release is reflected in an updated Encumbrance Certificate before you pay.
5. Collect the original title documents from the bank, which are returned once the loan is closed.
6. For your own new loan, budget about 0.6 percent of the sanctioned amount for MODT.
7. Ensure your own MODT is registered within the deadline so you avoid any penalty.

Do not treat the discharge as a formality the seller will get to later. Until the charge is released and the title documents are back with the seller, the property is still security for a loan, and paying for it in that state is a genuine risk. The safest sequence is to make the final payment conditional on a clean Encumbrance Certificate and the original documents in hand, so the release and your purchase close together rather than on the seller's promise.

Can you avoid MODT with a different kind of mortgage?

Not in a way most buyers would want, because the registered charge is what protects the public record. Some equitable mortgages historically relied only on the deposit of title deeds without registration, but a registered MODT is what makes the mortgage visible in the Encumbrance Certificate and is the norm for a Bengaluru home loan today. Trying to sidestep it is neither practical nor wise, because an unregistered charge is exactly the kind of hidden claim that hurts a future buyer. The better approach is to accept MODT as a genuine cost of borrowing, budget the roughly 0.6 percent, and make sure it is properly registered and, later, properly released. For a home such as Prestige Avon on Thanisandra Main Road, factor the MODT into your total closing cost alongside stamp duty and registration.

Frequently asked questions

What are MODT charges in Karnataka?

MODT charges in Karnataka are about 0.6 percent of the sanctioned home loan, roughly 0.5 percent stamp duty and 0.1 percent registration on the loan amount. On a 50 lakh loan that is around 30,000 rupees. Karnataka sets no maximum cap, so the charge rises with the size of your loan.

Is MODT compulsory for a home loan in Bengaluru?

In practice yes, because lenders in Karnataka register a MODT as a standard step to secure the mortgage on your home loan. It records the bank's charge and makes it part of the public record through the Encumbrance Certificate. Assume it applies to your loan and budget the roughly 0.6 percent of the sanctioned amount from the start.

Does MODT show up in the Encumbrance Certificate?

Yes. Because MODT is registered, the mortgage charge is recorded publicly and appears in the property's Encumbrance Certificate, which is how a future buyer or bank can see a loan exists on the property. If you are buying a resale flat, an MODT still showing means the mortgage has not been released, so have it cleared before paying.

How does a resale buyer clear a seller's MODT?

The seller closes the loan and obtains a deed of discharge or reconveyance that releases the bank's charge, which should reflect in an updated Encumbrance Certificate. As the buyer, ask for the closure statement, the discharge deed, and a fresh Encumbrance Certificate showing the charge removed, and confirm the original documents are back from the bank.

Last updated 2026-09-17. PropNewz Team.