equity of redemption

n.
The right of one who has mortgaged property to redeem that property upon payment of the sum due within a reasonable amount of time after the due date.

Right of mortgagor to redeem his property (save it from Foreclosure), after Default in the payment of the Mortgage debt, by subsequent payment of all costs and interest, in addition to the mortgage debt, to the mortgagee.

The right of an owner to redeem property securing a loan that has been accelerated prior to Foreclosure. See Statutory Right of Redemption.
Example: Abel's property is about to be foreclosed because he has not met his Mortgage obligation. If he raises enough money before the loan is foreclosed, he may reclaim the property by paying thePrincipal, Interest and legal expenses, under equity of redemption laws. Depending on state law, he may be able to reclaim the property after foreclosure.

This entry contains information applicable to United States law only.

The right of a mortgagor, that is, a borrower who obtains a loan secured by a pledge of his or her real property, to prevent foreclosure proceedings by paying the amount due on the loan, a mortgage, plus interest and other expenses after having failed to pay within the time and according to the terms specified therein.

This right is based upon the equitable principle that it is only fair that a borrower have a final opportunity to keep his or her property even if he or she has failed to make payments on the mortgage, since the property is to be sold in foreclosure proceedings.

The equity of redemption must be exercised by a mortgagor within a certain time after having defaulted on an obligation. It exists only from the time of default to the time that foreclosure proceedings are commenced.