The Bluebirds dominated for large parts of the contest but fell behind to Prince Buaben's second-half strike before Loach's ill-judged attempt to clear a long throw-in ended with Adrian Mariappa turning the ball into his own net.
Mackay, who was in charge at Watford for over 100 games as caretaker and full-time boss, was given a fairly easy ride by the home fans.
The same could not be said for Cardiff midfielder Don Cowie, who was roundly booed by the supporters of his former club. He had numerous chances to silence them in a first half which the visitors controlled.
Filip Kiss delivered for Cowie but his guided header was brilliantly tipped wide by Loach with just six minutes gone.
The Hornets goalkeeper flapped at Peter Whittingham's resulting corner but Mark Hudson could not capitalise as he skied his headed effort well over the bar.
Cowie went close again after 14 minutes when his looping header from Andrew Taylor's cross deceived Loach before landing on the roof of the net.
The personal duel between Cowie and Loach continued moments later when the goalkeeper palmed at the ball unconvincingly and it fell for the Scot but Carl Dickinson was on hand to block his goal-bound strike.
Sean Dyche's side finally created an opening midway through the half when a rapid counter-attack ended with Jonathan Hogg unleashing a vicious long-range drive which forced a smart stop from David Marshall.
They were fortunate not to fall behind with half an hour gone when Dickinson's poor defensive header allowed Taylor to cross for Whittingham, whose first-time shot crashed off the inside of the post and bounced back into the arms of Loach.
The visitors still had time to create and spurn one more chance before the interval, this time Aron Gunnarsson steering a close-range effort straight at Loach.
Despite their supremacy, Cardiff went in goalless at half-time for the 12th time in the league this season.
There were further warning signs for the hosts after the break as Whittingham advanced unopposed before rifling in a dangerous shot which Hogg managed to deflect wide.
Dyche's men momentarily relieved the pressure with a rare foray forwards, Michael Kightly's cross finding Troy Deeney but he could not direct his header on target.
Mackay made a bold tactical move around the hour mark, introducing young French striker Rudy Gestede for midfielder Kiss.
But it backfired when Watford took the lead against the run of play. Marvin Sordell fed Buaben and the Ghanaian midfielder arrowed home from inside the box to open his account for the club after 62 minutes.
With a renewed confidence about them, Watford pressed again and when Sordell was fouled on the edge of the box the home crowd were baying for a red but Taylor escaped with a yellow.
Just as City were appearing to fade, they were handed a way back into the match when Loach raced out to deal with a long throw but the ball clipped off Mariappa and into the net.
Kightly's glancing header forced a late save from Marshall but it ended all square as Watford made it seven unbeaten, while Cardiff have now failed to win in three.