A mortgage is a loan secured from a mortgage lender to buy a property for the purpose of home-ownership, and paid off in installments over a set period of time. The length of time that the borrower agrees to take to pay off the loan is known as the Tenor of the mortgage.
A mortgage is made up of two elements â€“ the Capital, which is the original amount borrowed to buy the property; and the Interest, the amount charged to lend you the money. The mortgaged property secures your promise that the money you borrowed will be repaid. If the loan is not repaid as agreed, the lender can take possession of the property and sell it to recoup the money owed. For most people, a mortgage is the largest and most serious financial obligation they will ever make.