Mortgage vs. Loan: What's the Difference?
Edited by Harlon Moss || By Janet White || Published on November 19, 2023
Mortgage: Loan specifically for property. Loan: Borrowed money that must be repaid.
Key Differences
A mortgage is a type of loan specifically secured against real estate property. A loan is a broader term, representing any borrowed funds.
Mortgages are typically long-term, often lasting 15 to 30 years. Loans can have varied lengths, from short-term to long-term.
In a mortgage, the property is collateral; defaulting can lead to foreclosure. In general loans, collateral can vary or be unsecured.
Mortgages are primarily used for buying homes. Loans can be used for diverse purposes, including education or personal expenses.
The term “mortgage” is exclusively used in real estate context. The term “loan” is used in various financial contexts.
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Comparison Chart
Specificity
Specifically for property
Can be for various purposes
Collateral
Property as collateral
Varied or unsecured collateral
Duration
Typically long-term
Varies from short to long-term
Usage
Mainly for real estate purchases
Diverse uses, including personal needs
Terminology Context
Exclusive to real estate
Broad financial contexts
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Mortgage and Loan Definitions
Mortgage
Debt secured by real estate.
Paying off the mortgage was their top priority.
Loan
Agreement between lender and borrower.
They signed the loan document with the bank.
Mortgage
Long-term property loan.
They refinanced their mortgage to lower the interest rate.
Loan
Financial assistance with interest.
He received a low-interest loan for his studies.
Mortgage
Legal agreement with property as collateral.
Their mortgage agreement was for 30 years.
Loan
Financial transaction with repayment terms.
Their car was financed through a personal loan.
Mortgage
Lender's claim on a borrower's property.
The bank held the mortgage on their home.
Loan
Borrowed money to be repaid.
She applied for a loan to start her business.
Mortgage
A loan for the purchase of real property, secured by a lien on the property.
Loan
An instance of lending
A bank that makes loans to small businesses.
Mortgage
The document specifying the terms and conditions of the repayment of such a loan.
Loan
A sum of money that is lent, usually with an interest fee
Took out a loan to buy a car.
Repaid the loan over five years.
Mortgage
The repayment obligation associated with such a loan
A family who cannot afford their mortgage.
Loan
The agreement or contract specifying the terms and conditions of the repayment of such a sum.
Mortgage
The right to payment associated with such a loan
A bank that buys mortgages from originators.
Loan
The repayment obligation associated with such an agreement
She couldn't afford the loan after losing her job.
Mortgage
The lien on the property associated with such a loan.
Loan
The right to payment associated with such an agreement
A bank that buys consumer loans.
Mortgage
To pledge (real property) as the security for a loan.
Loan
The state of being lent for temporary use
A painting on loan from another museum.
Mortgage
To make subject to a claim or risk; pledge against a doubtful outcome
Mortgaged their political careers by taking an unpopular stand.
Loan
To lend (money or property).
Mortgage
(legal) A special form of secured loan where the purpose of the loan must be specified to the lender, to purchase assets that must be fixed (not movable) property, such as a house or piece of farm land. The assets are registered as the legal property of the borrower but the lender can seize them and dispose of them if they are not satisfied with the manner in which the repayment of the loan is conducted by the borrower. Once the loan is fully repaid, the lender loses this right of seizure and the assets are then deemed to be unencumbered.
We're renting a property in the city centre because we can't afford to get a mortgage yet.
Loan
An act or instance of lending, an act or instance of granting something for temporary use.
Because of the loan that John made to me, I was able to pay my tuition for the upcoming semester.
Mortgage
(obsolete) State of being pledged.
Lands given in mortgage
Loan
A sum of money or other property that a natural or legal person borrows from another with the condition that it be returned or repaid over time or at a later date (sometimes with interest).
All loans from the library, whether books or audio material, must be returned within two weeks.
He got a loan of five thousand pounds.
Mortgage
To borrow against a property, to obtain a loan for another purpose by giving away the right of seizure to the lender over a fixed property such as a house or piece of land; to pledge a property in order to get a loan.
To mortgage a property, an estate, or a shop
We mortgaged our house in order to start a company.
Loan
The contract and array of legal or ethical obligations surrounding a loan.
He made a payment on his loan.
Mortgage
To pledge and make liable; to make subject to obligation; to achieve an immediate result by paying for it in the long term.
Loan
The permission to borrow any item.
Thank you for the loan of your lawn mower.
Mortgage
A conveyance of property, upon condition, as security for the payment of a debt or the preformance of a duty, and to become void upon payment or performance according to the stipulated terms; also, the written instrument by which the conveyance is made.
Loan
(Scotland) A lonnen.
Mortgage
State of being pledged; as, lands given in mortgage.
Loan
To lend (something) to (someone).
Mortgage
To grant or convey, as property, for the security of a debt, or other engagement, upon a condition that if the debt or engagement shall be discharged according to the contract, the conveyance shall be void, otherwise to become absolute, subject, however, to the right of redemption.
Loan
A loanin.
Mortgage
Hence: To pledge, either literally or figuratively; to make subject to a claim or obligation.
Mortgaging their lives to covetise.
I myself an mortgaged to thy will.
Loan
The act of lending; a lending; permission to use; as, the loan of a book, money, services.
Mortgage
A conditional conveyance of property as security for the repayment of a loan
Loan
That which one lends or borrows, especially a sum of money lent at interest; as, he repaid the loan.
Mortgage
Put up as security or collateral
Loan
To lend; - sometimes with out.
By way of location or loaning them out.
Mortgage
Loan for buying property.
They took out a mortgage to buy their first house.
Loan
The temporary provision of money (usually at interest)
Loan
A word borrowed from another language; e.g. `blitz' is a German word borrowed into modern English
Loan
Give temporarily; let have for a limited time;
I will lend you my car
Loan me some money
Loan
Temporary provision of funds.
The company took out a loan to expand operations.
FAQs
How is a mortgage different from a general loan?
Mortgages are specifically secured against property.
Are mortgages long-term?
Typically, they last 15 to 30 years.
What is a loan?
Borrowed money that must be repaid.
Do loans always involve interest?
Typically, but interest rates vary.
What is a mortgage?
A loan specifically for purchasing property.
Can loans have various purposes?
Yes, loans can be used for many purposes.
What's the role of credit in getting a mortgage?
Good credit can secure better terms.
Is credit important for a loan?
Yes, it often influences approval and terms.
What happens if you default on a mortgage?
The property can be foreclosed.
Is a mortgage used for anything other than property?
No, it’s exclusively for real estate.
Do mortgages affect property ownership?
Yes, until fully repaid.
Can mortgages be transferred?
Yes, under certain conditions.
Can loans be short-term?
Yes, loan durations can vary.
Can loans be unsecured?
Yes, some loans don’t require collateral.
What’s a personal loan?
A loan for individual use without specific purpose.
Are mortgages available for commercial properties?
Yes, commercial mortgages exist.
Can loans cover personal expenses?
Yes, personal loans are common.
Can mortgages be refinanced?
Yes, to adjust rates or terms.
What’s a loan consolidation?
Combining multiple loans into one.
Are student loans different from personal loans?
Yes, student loans are specifically for education.
About Author
Written by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Harlon MossHarlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
