Short answer. Yes, between the two of you. Even though registration is required to fully constitute a real estate mortgage, the Civil Code says that if the instrument is not recorded, the mortgage is nevertheless binding between the parties. It holds you and the lender to their agreement, though it lacks effect against third persons.
What the law says
If the instrument is not recorded, the mortgage is nevertheless binding between the parties.
Civil Code, Article 2125 — Registration of the Mortgage. Read the full provision →
Registration is required but not for validity between you
Article 2125 says that, on top of the essential requisites of a mortgage, it is indispensable that the document be recorded in the Registry of Property for the mortgage to be validly constituted. That sounds fatal to an unregistered mortgage. But the very next sentence rescues your agreement: if the instrument is not recorded, the mortgage is nevertheless binding between the parties. So as between you and your lender, the mortgage you signed still holds. The failure to register does not erase the obligation the two of you actually agreed to.
What binding between the parties gives the lender
Between the immediate parties, the unregistered mortgage operates as a valid contract. The lender can hold you to it, and the article itself spells out a further right: a person in whose favor the law establishes a mortgage may demand the execution and the recording of the document in which the mortgage is formalized. In practice this means the lender can compel you to complete the registration, turning the personal agreement into a fully constituted mortgage. The contract is not a dead letter; it carries real, enforceable duties even before it ever reaches the Registry.
Why registration still matters
The gap left by non-registration shows up against outsiders. Registration is what gives a mortgage effect against third persons — later buyers, other creditors, or a second mortgagee who deals with the property in good faith without notice of your unrecorded lien. An unregistered mortgage generally cannot bind such third parties, and the lender's security can be defeated by someone who records first. So the mortgage is strong as between you and the lender, but weak as a shield against the rest of the world until it is properly recorded.
The requisites still have to be met
Being binding between the parties does not excuse the basic requirements of a valid mortgage. The essential requisites still apply: the mortgage must secure the fulfillment of a principal obligation, the mortgagor must be the absolute owner of the property, and he must have free disposal of it or be legally authorized to encumber it. If any of these is missing, the agreement fails on its own terms, registered or not. Article 2125 saves an otherwise valid mortgage from the single defect of non-registration — it does not cure deeper flaws.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Paradigm Development Corporation of the Philippines vs. Bank of the Philippine Islands, G.R. No. 191174, June 7, 2017 — read the decision on LawPhil →
- Philippine Charity Sweepstakes Office (PCSO) vs. New Dagupan Metro Gas Corporation, et al, G.R. No. 173171, July 11, 2012 — read the decision on LawPhil →
- Sps. Adelina S. Cuyco and Feliciano U. Cuyco vs. Sps. Renato Cuyco and Filipina Cuyco, G.R. No. 168736, April 19, 2006 — read the decision on LawPhil →