A mortgage is a legally binding agreement you and a lender and are usually signed into contract when you purchase a house. When you sign a mortgage, you are buying a home in good faith – and if you fail to repay the mortgage for whatever reason, the lender can take possession of the house. Usually, mortgages will include the money borrowed to purchase the home, plus interest.
The way a mortgage work is basically: You borrow money to purchase a home. You pay back the money over a period of time, plus any interest that was agreed upon at the time of signing. There’s usually a min. of 5% deposit, and you’re then allowed to borrow the rest from a lender. The majority of mortgages are usually 15 year or 30 year agreements, and can be paid off early.