The original phrase ‘mort gage’ translates as ‘death pledge’! But as this video explains, a mortgage is a loan obtained to purchase real estate.
The “mortgage” itself is a lien – a legal claim on the home or property that secures the promise to pay the debt.
All mortgages have two features in common: principal and interest.
The principal is the amount you are borrowing which is ‘secured’ by the lender’s claim on the property.
The interest, usually stated as the percentage rate is the additional amount paid for borrowing. Mortgage interest is ‘compounded’ – interest on interest, over time.