real estate

mortgage

A loan used to purchase real estate, secured by the property itself as collateral.

Example

"They got a 30-year mortgage at 4% interest to buy their first home."

💡 Memory Tip

MORT-gage — mort means death. The pledge (debt) dies when you finally pay it off.

Etymology

From Old French 'mort gage' meaning 'dead pledge' — the pledge (loan) dies when paid off or when the property is taken.

Common Misspellings

morgagemorgidgemortagemortgige

Related Terms

interest rateprincipalescrowforeclosure

Want to understand money better? Get money tips and new terms in your inbox.