MODT Charges in Karnataka: The Title Deed Deposit on a Home Loan
MODT is the short name for the Memorandum of Deposit of Title Deeds, the paper that records a home loan mortgage in Karnataka. This guide explains what the memorandum does, what it costs at different loan sizes and how it is registered. It also covers what happens to it on a balance transfer and when the loan is closed.
What the Memorandum Records
Most home loans in Bangalore are secured by a mortgage by deposit of title deeds. The borrower hands the original sale deed and the earlier link documents to the bank or housing finance company, which holds them as security. Ownership and possession stay with the borrower throughout the loan.
The memorandum is the written record of that deposit. It names the borrower, the lender, the loan amount, the property and the documents handed over. Once registered at the sub-registrar's office, it enters the public record for that property.
Lenders prefer this route because it is simpler than a registered mortgage deed drawn up in full. It still gives them an enforceable charge over the property until the last instalment is paid.
MODT Charges in Karnataka
Two charges are paid to the state when the memorandum is registered. Stamp duty is 0.5% of the loan amount, and a registration fee is collected along with it. Sub-registrar offices also collect a small scanning fee for each page.
The duty was 0.1% until the Karnataka Stamp (Amendment) Act, 2023 took it to 0.5%, with the notification issued on 3 February 2024. The same amendment removed the earlier ceiling on the duty for larger loans. For a loan of Rs. 10 Lakhs or less, the duty is also 0.5%, with a minimum of Rs. 500.
The table shows the stamp duty at common loan sizes.
| Loan amount | Stamp duty at 0.5% |
|---|---|
| Rs. 20 Lakhs | Rs. 10,000 |
| Rs. 40 Lakhs | Rs. 20,000 |
| Rs. 60 Lakhs | Rs. 30,000 |
| Rs. 80 Lakhs | Rs. 40,000 |
| Rs. 90 Lakhs | Rs. 45,000 |
The charges are set by the state, so they are identical with every bank and housing finance company. They are calculated on the sanctioned loan and have no link to the price of the home.
How MODT Differs From Stamp Duty on the Sale Deed
Buyers often assume the duty paid on the sale deed covers the mortgage as well. The two are separate documents with separate charges, and a buyer who takes a loan pays both.
- Sale deed: duty and registration on the property value, for the transfer of ownership
- MODT: the same two charges on the sum borrowed, for the mortgage to the lender
- Sale deed charges on a home above Rs. 45 Lakhs: 5.6% duty with cess and surcharge, plus a 2% registration fee
- MODT charges: 0.5% duty on the loan, plus the registration fee
On a flat of Rs. 80 Lakhs bought with a loan of Rs. 64 Lakhs, the sale deed costs Rs. 6.08 Lakhs in duty and registration. The memorandum adds Rs. 32,000 of duty, plus its registration fee. Lenders keep both out of the loan, so the whole amount comes from the buyer's savings.
How the Memorandum Is Registered
The lender's lawyer prepares the memorandum once the sale deed is registered and the original is available. The duty and the fee are paid online through the state's Kaveri registration system. The borrower and the lender's representative then complete the registration at the sub-registrar's office.
The Registration Act gives four months from the date of signing to present a document for registration. Lenders rarely let it run that long, because they want the security in place around the time of disbursement. For a flat under construction, the title deed exists only after the sale deed is registered, so lenders usually record the deposit at that stage.
A few lenders take the MODT amount along with their own fees and pay it on the borrower's behalf, and others ask the borrower to pay it directly. The sanction letter or the Key Facts Statement should show which method applies, so the charge is counted once.
What It Shows in the Encumbrance Certificate
A registered memorandum appears as an entry in the encumbrance certificate of the property. Anyone who draws the certificate later sees that the property is mortgaged and to which lender. The lender also files the mortgage with CERSAI, the central registry of security interests.
This entry matters in a resale. A buyer's lawyer who finds an open mortgage entry will ask for proof that the loan is closed and the entry discharged. Sellers with a running loan should plan the closure and the release before the sale deed is signed.
Balance Transfer and Top-up Loans
MODT is paid again when a home loan moves to another lender. The old lender releases its mortgage, and the new lender registers a fresh memorandum for its own loan. On an outstanding loan of Rs. 60 Lakhs, that means Rs. 30,000 in stamp duty alone.
The amount belongs in the break-even sum for any transfer, next to the new lender's processing fee. A top-up loan may also need a further deposit to be recorded for the added amount. The lender's fee sheet should state this before the offer is accepted.
Releasing the Mortgage After the Loan Is Closed
Full repayment does not clear the entry by itself. The lender returns the original deeds and issues a no-dues certificate, and a release or discharge of the mortgage is then registered at the sub-registrar's office. The RBI requires lenders to return the original documents and remove their registered charges within 30 days of full repayment.
The borrower should confirm three things at closure.
- Every original document listed in the memorandum has come back
- A fresh encumbrance certificate shows the discharge entry
- The CERSAI record is marked as satisfied
Money paid to the state on the memorandum is not refunded at closure. They are a one-time cost of the mortgage and are best treated that way in the purchase budget.
Budgeting for MODT
The charge is fixed by law, so the practical step is to plan for it early. A buyer who knows the likely loan amount knows the MODT duty in advance. It belongs with the sale deed charges and the lender's fees in the cash to be kept ready before disbursement.
A quote well above 0.5% of the loan deserves a question to the lender, who should show the registration fee and the scanning charges as separate lines. The EMI calculator shows the upfront cash for a chosen price and loan. We also share the cost sheet for any project in Bangalore on request, so these charges are planned with the price.
