Mortgage
Mortgage: Meaning and Origin
Mortgage is a noun and verb related to borrowing money to buy property, usually a home. As a noun, it means a loan secured by real estate. As a verb, to mortgage means to use property as security for a loan.
Simple meaning
A mortgage is a long-term loan used to buy a house, apartment, land, or other real estate. The property acts as security:if the borrower does not repay the loan, the lender may be able to take the property through foreclosure.
For example, “They took out a mortgage to buy their first home” means they borrowed money from a bank or lender, using the home as security.
Main meanings
- A property loan: money borrowed to buy real estate, repaid over time with interest. Example:They applied for a 30-year mortgage.
- A legal agreement: an arrangement in which property is used as collateral for a debt. Example:The mortgage gives the lender a legal claim on the house.
- A debt secured by property: the amount of money still owed on a property loan. Example:They still have $200,000 left on their mortgage.
- To pledge property for a loan: as a verb, to use a property as security. Example:He mortgaged his house to fund the business.
- A heavy burden: figuratively, a mortgage can represent a major financial responsibility. Example:The mortgage became a heavy burden after he lost his job.
Pronunciation and grammar
Mortgage is pronounced /ˈmɔːrɡɪdʒ/, roughly “MOR-gij.” The t is silent.
- Noun: mortgage
- Verb: to mortgage
- Past tense: mortgaged
- Present participle: mortgaging
- Person who borrows: mortgagor
- Person or institution that lends: mortgagee
- Related noun: mortgage lender, mortgage payment, mortgage rate
Origin of the word
The word mortgage comes from Old French morgage or mort gaige, which literally means “dead pledge.” It combines:
- mort, meaning “dead”
- gage, meaning “pledge” or “security”
The term entered English in the late 14th century. In medieval law, a “dead pledge” was an arrangement in which the lender received the income or benefits from pledged land, while the borrower did not receive those benefits until the debt was repaid. In that sense, the land was “dead” to the borrower during the loan period.
There are two common explanations for the “dead” part of the name:
- The debt dies: When the borrower fully repays the loan, the pledge ends and the debt becomes void.
- The property is lost: If the borrower fails to repay, the lender may take the property, so the borrower’s claim to it ends.
The word path is roughly:
- Latin:mortuus, meaning “dead,” from mori, “to die”
- Old French:mort, meaning “dead”
- Germanic source:wadj-, related to a pledge or security
- Old French:gage, meaning “pledge” or “security”
- Old French:mort gaige / morgage, meaning “dead pledge”
- Middle English:morgage / mortgage, meaning a property pledge for a loan
- Modern English:mortgage, meaning a loan secured by real estate
Is “death pledge” the real meaning?
Yes, literally. The Old French roots of mortgage mean “dead pledge.” However, it does not originally refer to the death of a person. It refers to the ending of the legal pledge:the arrangement “dies” when the loan is repaid or when the lender takes the property because the borrower cannot repay.
Interesting facts
- The “t” is silent: Although mortgage is spelled with a t, English speakers do not pronounce it.
- It is related to “mortal” and “morgue”: The mort- part comes from Latin roots connected with death. Words such as mortal, mortuary, and morgue share this general root.
- “Gage” is related to “wage”: The Old French gage meant a pledge or security. English wage also developed from related Germanic roots.
- Medieval mortgages could be very harsh: In some medieval arrangements, the lender kept all income from the land until the debt was paid, while the borrower received no benefit from the property. This was called a “dead pledge.”
- There was also a “living pledge”: In contrast, a vif gage, or “living pledge,” allowed the income from the property to reduce the borrower’s debt.
- The modern mortgage developed in England: In later medieval England, a borrower often transferred ownership of land to a lender on the condition that the lender would return it after repayment. Over time, this developed into the modern mortgage system.
- A mortgage is not the house itself: Strictly speaking, the mortgage is the loan agreement and legal security arrangement. The house is the collateral.
- Mortgages usually involve interest: Borrowers repay both the original loan amount, called the principal, and an additional charge called interest.
Mortgage vs. loan
| Word | Meaning | Usage |
|---|---|---|
| Mortgage | A loan secured by real estate | Usually used for buying a home, apartment, land, or other property. |
| Loan | Money borrowed that must be repaid | A general term; it can be for a car, education, business, or home. |
| Collateral | Property or assets pledged as security for a loan | In a mortgage, the home or land is usually the collateral. |
| Lien | A legal claim on property until a debt is paid | A mortgage normally creates a lien on the property. |
| Foreclosure | The legal process by which a lender takes property after nonpayment | May occur if a borrower fails to make mortgage payments. |
Examples
| Example | Meaning |
|---|---|
| Take out a mortgage | To borrow money to buy property. |
| Pay off a mortgage | To finish repaying the property loan. |
| Mortgage payment | A regular payment made toward the mortgage, often including principal, interest, taxes, and insurance. |
| Mortgage rate | The interest rate charged on a mortgage loan. |
| Mortgage lender | A bank, credit union, or company that provides mortgage loans. |
| Mortgage application | A formal request to borrow money to buy property. |
| Reverse mortgage | A loan arrangement, often for older homeowners, that allows them to receive money based on the value of their home. |
| Mortgage the house | To use the house as security for a loan. |
Related words
- Mortgagor: the borrower who pledges property as security.
- Mortgagee: the lender who receives the security interest in the property.
- Principal: the original amount of money borrowed.
- Interest: the cost of borrowing money, usually expressed as a percentage.
- Collateral: property pledged as security for a loan.
- Foreclosure: the legal process of taking possession of property after a borrower fails to repay.
- Refinance: to replace an existing mortgage with a new one, often to obtain a better interest rate or different repayment terms.
- Equity: the portion of a property’s value that the owner truly owns after subtracting the remaining mortgage debt.
In short: mortgage literally means “dead pledge” in Old French. It describes a loan secured by property; the pledge ends when the debt is repaid or when the lender takes the property because the borrower cannot repay.