Mortgage

Mortgage. A mortgage, or more precisely a mortgage loan, is a long-term loan used to finance the purchase of real estate.

As the borrower, or mortgager, you repay the lender, or mortgagee, the loan principal plus interest, gradually building your equity in the property.

The interest may be calculated at either a fixed or variable rate, and the term of the loan is typically between 10 and 30 years.

While the mortgage is in force, you have the use of the property, but not the title to it. When the loan is repaid in full, the property is yours. But if you default, or fail to repay the loan, the mortgagee may exercise its lien on the property and take possession of it.