Equity of Redemption Law and Legal Definition
An equity of redemption, or legal right to redeem, is that right which the owner of the property has to regain the complete title to his/her property by the payment to the purchaser of the amount for which the property was sold, with interest and penalties, in accordance with the provisions of the statute. The equity of redemption must not be confused with a right of redemption. A mortgagor has an equity of redemption until the sale, and not afterward. After sale, s/he has a right of redemption if the statute gives it. Therefore, the equity of redemption is a valuable interest, a legal estate and may be sold or transferred to another.
In Portland Mortg. Co. v. Creditors Protective Ass'n, 199 Ore. 432 (Or. 1953), the court observed that “Equity of redemption is the right to redeem from the mortgage -- to pay off the mortgage debt -- until this right is barred by a decree of foreclosure; but until this right is barred, an estate, in law or in equity, is just the same after as it was before default. It is a right, though, of which the law takes no cognizance, and is enforceable only in equity, and has nothing to do with the statute of redemptions. This is a valuable right, and exists not only in the mortgagor himself, but in every other person who has an interest in, or legal or equitable lien upon, the mortgaged premises, and includes judgment creditors, all of whom may insist upon a redemption of the mortgage. Nor can one, against his consent, be deprived of this right without due process of law. To bar his right of redemption, he must be made a party to the foreclosure, or the proceedings, as to him, will be a nullity.”