Collateral Advantage

Collateral advantage, is a provision giving the mortgagee a benefit over and above the repayment of the advance, with interest. To be invalid, such a benefit must form part of the mortgage transaction; if the advantage arises out of a separate arrangement then it may be enforced even after redemption. Whether a provision giving rise to the collateral advantage is part of mortgage transaction, or is separate from it, is a question of substance rather than form, Kreglinger v. New Patagonia Meat and Cold storage Co. Ltd., (1914) AC 25 HL.