Ship Mortgage Law and Legal Definition

The term ship mortgage implies the security on a ship and its appurtenances by the ship-owner as security for a loan. Ship mortgages can be either legal or equitable mortgages and can be either registered or unregistered. It is a common means of financing the construction or purchase of a ship. Ship mortgages usually include all the machinery but not cargo or freight. However, in some jurisdictions, cargo or freight can be the subject of distinct mortgages although they are not usually registered. In the case of a foreclosure, such mortgages are subject to maritime lien.