When taking a home loan in India, banks often ask borrowers to register a Memorandum of Deposit of Title Deed (MODT) as proof of property mortgage. These MODT charges, usually 0.1%–0.5% of the loan amount, vary across states and add to the overall cost of borrowing.
The Memorandum of Deposit of Title Deed (MODT ) confirms the lender holds your title deed as collateral until the loan is repaid. Knowing about MOD and other fees like NOI charges helps you prepare financially and avoid surprises.
MODT Charges For Home Loans
MODT (Memorandum of Deposit of Title Deed) charges for home loans in India typically range from 0.1% to 0.5% of the total loan amount. Here are the key details:
Charge Percentage
- Typically ranges between 0.1% to 0.5% of the total loan amount(capped at ₹25,000-₹30,000 in many states).
- Some sources indicate variations by state and bank
Important Characteristics
- Who Pays: The borrower pays the MODT charges
- Purpose: Serves as a legal document allowing the lender to hold property title deeds as security
- Calculation: Computed based on the home loan amount
Example Calculation
For a home loan of Rs. 20 lakhs, MODT charges at 0.3% would amount to Rs. 6,000.
Note: Always confirm the exact MODT charges with your specific bank, as rates can vary by location and individual bank policies.
Also Read: MODT Cancellation Process and Charges
What are MODT Charges?
MODT charges (Memorandum of Deposit of Title Deed charges) are mandatory home loan charges paid for registering the mortgage of a property with state authorities. When you take a home loan in India, the bank records the title deed as security through MODT registration.
These home loan MODT charges usually range between 0.1%–0.5% of the loan amount, capped at ₹25,000–₹30,000 in many states. They are paid at the time of loan disbursement and differ state-wise. After the loan is closed, borrowers must also pay a small fee for MODT cancellation to release the title deed.
Suggested Read: Stamp Duty Charges in Top 10 Cities
How Are MODT Charges Calculated in India?
| Step | Action | Example (₹50,00,000 Loan) |
|---|---|---|
| 1 | Identify the sanctioned loan amount | ₹50,00,000 (₹50 lakh) |
| 2 | Apply the state-specific MODT rate (0.1%–0.5%) | 0.2% chosen for example |
| 3 | Calculate MODT fee = Loan Amount × Rate | ₹50,00,000 × 0.2% = ₹10,000 |
| 4 | Check state cap (₹25,000–₹30,000 in most states) | ₹10,000 is within cap |
| 5 | Add extra costs (registration/scanning/legal fees if applicable) | + ₹500–₹1,000 approx. |
| Final MODT Payable | (Loan Amount × Rate) or State Cap + Admin Fees | ₹10,000–₹11,000 |
State-Wise MODT Charges for Home Loans
| State | Stamp Duty Rate (MODT) | Registration Fee | Other Charges |
|---|---|---|---|
| Tamil Nadu | 0.5% of loan amount | 1% of loan amount | Stamp duty capped at ₹30,000; reg. fee capped at ₹6,000 |
| Karnataka | 0.5% of loan amount | 0.1% of loan amount | Scanning/document handling: ₹35 per page |
| Maharashtra | 0.3% of loan amount | Typically 1% (varies) | — |
| Andhra Pradesh | 0.1%–0.5% of loan amount | 1% of loan amount | — |
Why Do Banks Impose MOD Charges?
Banks have several reasons for imposing MOD charges, primarily related to legal requirements and security measures. These charges play a crucial role in the mortgage process.
Legal necessities
- Serves as proof of mortgage
- Creates a legal obligation for the borrower
- Establishes a right of claim for the lender
Security reasons
- Ensures lender’s hold over the property as collateral
- Enables loan recovery through property sale in case of default
Regulatory requirements
- Mandated by the Registration Act of 1908
- Ensures transparency and traceability in property transactions
- Provides a clear record of ownership and financial liabilities
Check Out: Stamp Duty and Registration Charges Calculator
MODT Cancellation Charges and Process
MODT Cancellation Process (Step-by-Step):
- Obtain NOC (No Objection Certificate) from the Bank/HFC after repaying your home loan in full.
- Collect Original Property Documents(Title Deed) from the lender after loan closure.
- Draft the MODT Cancellation/Release Deed confirming that the mortgage is cancelled.
- Submit the NOC, loan closure proof, and title deed for official cancellation at the Sub-Registrar’s Office.
- Pay MODT Cancellation Charges as per your state’s rules.
- Once processed, the MODT is cancelled and your property becomes debt-free in government records.
How to File MOD Online?
Here’s how To file MOD Online:
- Obtain Notice of Intimation (NOI)
Secure the NOI from your lender, which details your home loan disbursal. This document is essential for the MOD process.
- Timely Submission
Ensure you acquire and submit the NOI to the sub-registrar’s office within 30 days of your loan agreement.
- Prepare Required Documents
Gather all necessary documents for MOD deed registration.
- Access E-Filing Portal
Visit the e-filing portal of your state’s Department of Registrations and Stamps. Each state in India has its specific portal for such filings.
- Fill Out the Digital Form
Complete the digital form provided on the portal, entering the required personal and property details.
- Choose Payment Method for Stamp Duty: challan generated online.
Select your preferred mode of stamp duty payment, which could be via demand draft, e-payment, or cash payment at designated banks or through a
- Submit Form and NOI:
After filling out the form and arranging payment, submit the form along with the NOI at the respective sub-registrar’s office.
- Optional Lender Assistance:
Consider requesting your lending institution to handle the filing of the MOD on your behalf for added convenience.
How to File MODT Offline?
- Obtain Notice of Intimation (NOI): Get the NOI from your lender, which provides details about your home loan disbursal.
- Visit the Sub-Registrar’s Office: Take the NOI to the sub-registrar’s office, fill out the required form, and attach the NOI.
- Submit Required Documents: Along with the form and NOI, submit any additional documents requested by the office.
- Pay the Stamp Duty: Go to a designated bank to pay the stamp duty. The bank will verify your identity before processing the payment.
- Obtain Stamped Proof: After paying the stamp duty, the bank will issue a stamped proof of payment.
- Final Submission: Take the stamped proof and a photocopy of the NOI back to the sub-registrar’s office. Submit these for the final verification.
- Complete the Registration: The sub-registrar will review your application and, upon verifying the proof of duty payment, accept the hard copy of your documents.
How are MOD Charges Calculated in Karnataka?
MOD charges in Karnataka are determined by several factors:
| Factor | Description |
|---|---|
| Property Value | The charges largely depend on the market value of the property. Higher property values lead to higher MOD charges. |
| Type of Document | The nature of the document, whether it’s a sale deed, lease agreement, or any other legal document, affects the fee structure. |
| Location | The geographical location of the property plays a role. Properties in urban areas typically incur higher MOD charges compared to those in rural locations. |
| Stamp Duty | MOD charges are closely linked to stamp duty. The stamp duty is calculated as a percentage of the property’s market value, directly impacting the MOD charges. |
| Additional Fees | Other administrative charges, such as for expedited processing or extra copies of documents, can also add to the overall cost. |
| Government Policies | Changes in state government regulations or policies may influence the calculation of MOD charges, making it essential to stay updated. |
By considering these factors, you can better estimate the MOD charges for your property transaction and budget accordingly.
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Charges for Signing the MODT
When you secure a home loan, signing a Memorandum of Deposit of Title Deed (MODT) is a critical step that involves some costs.
Here’s how it works:
- The charges for signing an MOD primarily consist of stamp duty and processing fees.
- It usually ranges between 0.1% to 0.5% of your loan amount.
For example, if your home loan is ₹35 lakhs and the MOD charges are 0.5%, your cost would be around ₹17,500.
Impact of MODT on the Borrowers
The Memorandum of Deposit of Title Deeds (MOD ) is more than just an added expense for borrowers.
When taking out a home loan, borrowers might wonder why they are responsible for the MOD charges, especially since it seems like the bank benefits more from holding onto the title deeds:
- When the bank can request extra payments or collateral.
- Steps for property repossession, including notice periods.
- The bank’s obligation is to return title documents and provide an NOC upon full repayment.
- Borrower’s right to legally demand property titles if the bank delays returning documents.
Other Additional Home Loan Charges to Be Aware Of
While MOD charges are significant, there are several other fees associated with home loans. Being aware of all these charges helps in comprehensive financial planning.
- Service charges
- Processing fees
- Stamp duty and Registration fees
Comparison with MOD charges:
- MOD: Specifically for securing a loan with a property title deed
- Others: Cover broader aspects of property purchase and loan processing
Tips for managing charges:
- Compile a detailed list of all potential expenses from the lender
- Budget for each cost in the overall financial plan
- Explore competitive loan offers
- Negotiate with lenders to potentially reduce charges
“MODT charges, often overlooked in home loans, are essentially stamp duty on the Memorandum of Deposit of Title Deed. They usually range from 0.1%–0.5% of the loan amount, capped at ₹25,000–₹30,000 in most states. Since many borrowers discover them only at disbursement, it’s vital to factor in MODT along with processing and registration fees to know the true cost of a home loan.”
– Akul Agrawal, Home Loan Expert
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Conclusion
MODT charges in home loans are essentially the stamp duty on the Memorandum of Deposit of Title Deed, usually 0.1%–0.5% of the loan amount, capped at ₹25,000–₹30,000 in many states. These charges are paid during loan disbursement, while a small cancellation fee applies after repayment. Knowing the MODT rate, state-wise variations, and cancellation process helps borrowers plan costs better and choose the right lender with transparent fees.
Know Your Exact MODT Charges in Seconds!
Frequently Asked Questions
Yes, there may be nominal fees for MOD cancellation, which can vary by lender and state.
It is advisable to clarify these charges with your lending institution at the time of loan sanction to avoid unexpected costs.
MOD charges can increase the overall cost of your home loan, affecting your monthly repayments and loan-to-value ratio (LTV).
It is important to account for these charges to ensure they fit within your financial plan.
Interest on the refundable deposit is generally many times lower than a title deed deposit charge, which usually comes as a percentage of the home loan amount.
State and lender-specific, typically between 0.1% – 0.5% of the loan amount.
These charges are crucial as they serve legal proof or record of your title deeds against the property with the lender.
This means the bank has a legal right over your property if you go into default on your loan, and this is how most mortgage types work.
MOD (Memorandum of Deposit of Title Deed) charges are fees levied by banks or lending institutions when you deposit your property’s title deed as security for your home loan.
These charges validate the loan agreement and ensure the lender’s legal claim over the property.
Yes, signing a Memorandum of Deposit (MOD) is mandatory when obtaining a home loan in India.
This legal document records the lender holding your property’s title deeds as collateral until the loan is fully repaid.
MOD charges, borne by the borrower, typically range from 0.1% to 0.5% of the loan amount, with a maximum cap of Rs. 25,000, depending on state regulations.
Once the loan is repaid, the lender cancels the MOD and returns the title deeds to the borrower.
In Tamil Nadu, MODT charges for home loans include a stamp duty of 0.5% of the loan amount (capped at ₹30,000) and a registration fee of 1% (capped at ₹6,000).
Yes, mod charges (modification charges) can often be negotiated, depending on the lender, type of loan, and circumstances. Borrowers should discuss terms directly with their lender to explore potential reductions or waivers.
MODT charges (Memorandum of Deposit of Title Deed charges) are fees paid to register the mortgage of a property with the state authority when you take a home loan. They are essentially stamp duty on MODT, usually paid at the time of loan disbursement.
MODT charges in India generally range from 0.1% to 0.5% of the loan amount, with most states capping them at ₹25,000–₹30,000. For example, on a ₹50 lakh home loan at 0.2%, the MODT charge would be ₹10,000.
No, MODT charges are not refundable. They are government fees (stamp duty and registration charges) paid for registering the property’s mortgage and cannot be reversed once paid.
MODT charges are calculated as a percentage of the sanctioned loan amount. Formula:
Loan Amount × Applicable MODT Rate (0.1%–0.5%).
If the amount exceeds the state’s maximum cap, the capped amount is charged. Some states also add small registration or admin fees.
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