What Is a Mortgage? A Beginner’s Guide to Home Loans

What Exactly Is a Mortgage?

A mortgage is simply a loan you take out to buy a home. You borrow money from a lender, agree to pay it back over time—usually 15 to 30 years—with interest, and the lender holds the home as collateral until the loan is paid off.

Key Mortgage Terms You Should Know

Before you apply, get familiar with terms like principal (the amount you borrow), interest (the cost of borrowing), down payment (the amount you pay upfront), and escrow (a holding account for taxes and insurance). Knowing these basics helps you feel in control from day one.

Why It Matters

Mortgages are the key to homeownership for most people. The better you understand how they work, the easier it is to make smart decisions—from choosing a loan type to calculating monthly payments.