mortgage

A mortgage is a loan used to buy property, most often a house. It is not just money given to you at once; it is a legal agreement in which the borrower promises to repay the amount borrowed, plus interest, over a long period, often 15 to 30 years. The property becomes collateral for the loan. This means that if the borrower does not make the payments, the lender has the legal right to take the property and sell it to get the money back.

The word comes from Old French and literally meant "dead pledge." This old expression reflects the serious nature of the agreement: the pledge ended either when the debt was fully paid or when the borrower failed to pay and lost the property.

Today, there are different kinds of mortgages. A fixed-rate mortgage keeps the same interest rate over time, while an adjustable-rate mortgage can change later. There are also government-backed home loans in some countries. You will often hear people talk about mortgage rates, meaning the interest charged on the loan, because that greatly affects the total cost of buying a home.

The word can also be used as a verb. To mortgage something means to borrow money against it as security, usually property. In a more figurative sense, people sometimes say someone "mortgaged their future" to mean they took a serious risk that may cause problems later. Even so, the most common use is still the everyday one: a long-term home loan tied to property ownership.