Mortgage Definition

A mortgage is a legal pledge of property to a lender as security for a mortgage loan. The mortgage itself is not a debt but instead is a transfer of interest in property from the owner to the mortgage lender, and it includes the provision that the transfer of interest will be rescinded upon repayment of the associated debt. In most US jurisdictions, mortgages apply only to real estate though in some mortgages can be attached to other property.

State laws generally govern mortgage practices and various states have fairly distinct statutes dealing with mortgages, though mortgages fall into one of two basic approaches-mortgage deeds or deeds of trust. In any mortgage agreement, the borrower is referred to as the mortgagor and the lender is referred to as the mortgagee.