A mortgage is a loan used to buy property — a house, apartment, or commercial real estate. The property you buy serves as collateral. If you stop making payments, the bank can foreclose (seize and sell) the property to recover its money.
Typical mortgage terms: 15-30 years repayment period, 10-20% down payment, and interest rates of 6-9% (varying by country and credit score). In the US, the average home price is around $400,000, meaning a 20% down payment is $80,000 with a $320,000 mortgage.
The global mortgage market exceeds $33 trillion. The US alone has $13 trillion in outstanding mortgage debt. Types include fixed-rate (predictable payments), adjustable-rate (lower initial rate that changes later), and government-backed (FHA, VA). The 2008 financial crisis was triggered by reckless mortgage lending — a reminder of how central mortgages are to the financial system.