You act for a mortgagee, and have been requested to draft a mortgage over property in NSW. In relation to the interest, the mortgage is to provide for payment of interest at 10%, and 12% if late payment is made.

Which of the following answers best describes the response you should provide? Select one answer only.

A) A clause regarding late payment should not be included because it would be unenforceable, being considered as a penalty.

B) A clause regarding late payment can be included because the law on penalties does not apply to securities over real property

C) A clause regarding late payment should not be included as it is a clog on the equity of redemption

D) A clause regarding late payment can be included and will be enforceable as long as it is drafted in such a manner so that it is not regarded as a penalty