Definition
A loan secured by real estate, typically 15 or 30 years in the U.S. The property is collateral, so missed payments can end in foreclosure; the interest may be tax-deductible for itemizers.
Why it matters
A mortgage is the biggest debt most people ever carry and the cheapest: it is secured, long, and often the last debt worth prepaying. Understanding its mechanics (amortization, escrow, PMI) is homeownership literacy.
Example
A buyer borrows $300,000 at 6.5% for 30 years: about $1,896 a month before taxes and insurance. Over the full term the loan costs roughly $383,000 in interest, which is why extra early principal payments are so powerful.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.