The mortgagor can validly agree to pay compound interest, and thus he can agree that interest in arrear is to be capitalised and is to bear interest at the same rate as the original advance1. Compound interest does not, however, become capital: it retains its character as interest2. However, the mortgagee may not charge compound interest except under an agreement to that effect3. The agreement may be either express or implied from the nature of the dealings4. A mere intimation by the mortgagee that he intends to charge compound interest is not enough; there
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