Finance
What is A mortgage?
A mortgage is a loan used to buy property, where the property itself serves as collateral. You repay it over many years in regular installments of principal and interest, and the lender can take the home if you fail to pay.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains a mortgage.
Key things to understand
- 1It's a long-term loan to buy a home or property.
- 2The property secures the loan as collateral.
- 3You repay over years, with interest, in regular installments.
- 4Missing payments can lead to losing the property.
Frequently asked questions
- What is a mortgage in simple terms?
- A loan to buy property, repaid over years, with the property itself as security for the lender.
- What's the difference between principal and interest?
- Principal is the amount borrowed; interest is the extra cost the lender charges for lending it.
- What happens if you can't pay your mortgage?
- The lender can foreclose — take and sell the property to recover the money owed.