A mortgage is a type of loan used to purchase or maintain real estate, such as a home or commercial property. The borrower agrees to repay the lender over time, usually in monthly installments that include both principal and interest. The property itself serves as collateral for the loan, meaning if the borrower fails to repay, the lender has the right to take possession of the property through foreclosure and sell it to recover the loan amount
. Mortgages typically require an upfront deposit, with the lender providing the remaining funds needed to buy the property. There are different types of mortgages, such as fixed-rate mortgages (where the interest rate stays the same for a set period) and tracker mortgages (where the interest rate varies with a benchmark rate). Some mortgages are repayment mortgages, where monthly payments cover both principal and interest, while others are interest-only, where monthly payments cover only interest and the principal is repaid at the end of the term
. Mortgage terms usually range from 15 to 30 years, but can be shorter or longer depending on the agreement. The monthly payment amount and total cost depend on the loan type, term length, and interest rate. Mortgages are a common way for individuals and businesses to buy property without paying the full price upfront
