A mortgage is a method of using property (real or personal) as security for the
payment of a debt.

The term mortgage (from Law French, lit. dead pledge) refers to the legal
device used for this purpose, but it is also commonly used to refer to the debt
secured by the mortgage, the mortgage loan.

In most jurisdictions mortgages are strongly associated with loans secured on
real estate rather than other property (such as
ships) and in some cases only land may be mortgaged. Arranging a mortgage is
seen as the standard method by which individuals and businesses can purchase
residential and commercial real estate without the need to pay the full value
immediately. See mortgage loan for residential mortgage lending, and commercial
mortgage for lending against commercial property.

In many countries it is normal for home purchases to be funded by a
mortgage. In countries where the demand for home ownership is highest, strong
domestic markets have developed, notably in Spain, the United Kingdom and the
United States.

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Mortgage is the generic term for a loan secured by a real property. As with
other types of loans, mortgages have an interest rate and are scheduled to
amortize over a set period of time; typically 30 years. All types of real
property can, and usually are, secured with a mortgage and bear an interest
rate that is supposed to reflect the lender's risk.

Mortgage lending is the primary mechanism used in many countries to finance
private ownership of residential property. For commercial mortgages see the
separate article. Although the terminology and precise forms will differ from
country to country, the basic components tend to be similar:

    * Property: the physical residence being financed. The exact form of
ownership will vary from country to country, and may restrict the types of
lending that are possible.
    * Mortgage: the security created on the property by the lender, which will
usually include certain restrictions on the use or disposal of the property
(such as paying any outstanding debt before selling the property).
    * Borrower: the person borrowing who either has or is creating an ownership
interest in the property.
    * Lender: any lender, but usually a bank or other financial institution.
    * Principal: the original size of the loan, which may or may not include
certain other costs; as any principal is repaid, the principal will go down in
size.
    * Interest: a financial charge for use of the lender's money.
    * Foreclosure or repossession: the possibility that the lender has to
foreclose, repossess or seize the property under certain circumstances is
essential to a mortgage loan; without this aspect, the loan is arguably no
different from any other type of loan.