Answer
Yes, a mortgage is a specific type of loan used to purchase or refinance real estate, with the property pledged as collateral. If you default, the lender can enforce its security interest through foreclosure and sell the home to recover the unpaid balance.
What distinguishes a mortgage from other loans is this secured interest and its typically long term, often 15 or 30 years. Because it is secured, mortgage rates are usually lower than unsecured personal loans or credit cards.
Our mortgage payment calculator focuses on this kind of loan by estimating payments, interest, and amortization for various loan amounts, terms, and interest rates on homes.
Why “secured” matters
- The home is collateral: the lender has a lien on the property until the loan is paid off.
- Lower rates (usually): collateral reduces lender risk compared to unsecured debt.
- Longer terms: mortgages often stretch 15–30 years to keep payments manageable.
- Foreclosure is the remedy: missed payments can eventually lead to the lender taking legal steps to sell the home.
What your monthly “mortgage payment” usually includes
Many borrowers pay more than principal and interest each month. Depending on the loan and lender setup, your payment can also include property taxes and homeowners insurance (often collected via escrow), plus mortgage insurance when required.
Learn more about affordability
If you’re budgeting for a home purchase, it helps to look beyond what you can technically qualify for and focus on what fits your monthly cash flow.