What Is the Difference Between a Caveat Loan and a Mortgage?

The key difference between a caveat loan and a mortgage is how the lender’s interest is registered on the property.

A caveat records a financial interest in the property but does not, on its own, provide the same enforcement powers as a registered mortgage. Mortgages, whether first or second, offer a more structured form of security and are typically used for longer-term lending.

For this reason, caveat loans are usually used as a temporary funding solution, while mortgages are more suitable for ongoing finance.