What is Mortgage?
A mortgage is a loan used to buy or refinance real estate, where the property itself serves as collateral. The borrower makes monthly payments — typically over 15 or 30 years — that go toward both the loan balance (principal) and the cost of borrowing (interest). If the borrower fails to pay, the lender can foreclose and recover the property.
Example: A buyer purchases a $600,000 home with $120,000 down and borrows the remaining $480,000 through a 30-year mortgage, repaying it in monthly installments of principal and interest.