If the equitable mortgage(ie mortgage by deposit of title deeds) is an integral part of the main loan agreement then the same is liable to stamp duty at 3% and is to registered without fail as good as a Simple mortgage.
Instead of that take the memorandum of deposit to title deeds letter seperately and this is liable for stamp duty at 0.5% subject to a maximum of Rs. 50,000/- in A.P., and is not compulsorily registrable. In some states the same is registrable. The only difference is registration charges. It is universially advised to get the Memorandum of Deposit of title deed registered, so that even if the property is dealt with by the owner, the rights of the 1st mortgagor are always secured and it will be reflected in the Encumbrances Certificate, and any body who deals with the property, will be notified of the mortgage by Deposit of title deed. If you need I wll send you one such Memorandum which we naturally used in these places.