Mercy and Grace are two important theological concepts throughout the New Testament. They are listed side-by-side in 1 Timothy 1:2, and therefore refer to two separate gifts from God. Read how Lenski helpfully describes them:
ἔλεος (mercy) ". . .always deals with what we see of pain, misery and distress, these results of sin; and χαρίς (grace) always deals with sin and guilt itself. The one extends relief, the other pardon; the one cures, heals, helps, the other cleanses and reinstates." R. C. H. Lenski, The Interpretation of St. Matthew's Gospel 1-14 (Minneapolis: Augsburg Fortress, 2008), 191.