Definition
A loan used to purchase real estate, secured by the property itself.
Not sure where this fits?
Answer a few questions and we’ll open the path that fits, at the right step.
Find my pathAbout this term
A mortgage is a long-term loan (typically 15, 20, or 30 years) where the lender holds the property as collateral. You build equity as you pay principal and interest. The property is the lender's security if you default on the loan.
Pro Tip
Consider a 15-year mortgage if you can afford higher payments; you'll pay significantly less interest over time. Compare 15-year vs. 30-year options carefully.
Example
A $240,000 30-year mortgage at 7% interest costs approximately $1,596 per month in principal and interest (excluding taxes and insurance).