Define: Mortgage

Business, Legal & Accounting Glossary

Definition: Mortgage


Quick Summary of Mortgage


A legal agreement that conveys the conditional right of ownership on an asset or property by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan.



What is the dictionary definition of Mortgage?

Dictionary Definition


A lien on real property that is given by the buyer to the lender as a security for money borrowed.

  1. 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 farmland. 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.
  2. obsolete State of being pledged.

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Full Definition of Mortgage


A legal agreement that conveys the conditional right of ownership on an asset or property by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan. The lender’s security interest is recorded in the register of title documents to make it public information and is voided when the loan is repaid in full.

Virtually any legally owned property can be mortgaged, although real property (land and buildings) are the most common. When personal property (appliances, cars, jewellery, etc.) is mortgaged, it is called a chattel mortgage. In case of equipment, real property, and vehicles, the right of possession and use of the mortgaged item normally remains with the mortgagor but (unless specifically prohibited in the mortgage agreement) the mortgagee has the right to take its possession (by following the prescribed procedure) at any time to protect his or her security interest.

In practice, however, the courts generally do not automatically enforce this right when it involves a dwelling house, and restrict it to a few specific situations. In the event of a default, the mortgagee can appoint a receiver to manage the property (if it is a business property) or obtain a foreclosure order from a court to take possession and sell it. To be legally enforceable, the mortgage must be for a definite period, and the mortgagor must have the right of redemption on payment of the debt on or before the end of that period. Mortgages are the most common type of debt instruments for several reasons such as lower rate of interest (because the loan is secured), straight forward and standard procedures, and a reasonably long repayment period. The document by which this arrangement is effected is called a mortgage bill of sale, or just a mortgage.


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Examples of Mortgage in a sentence


Make sure the accounting department knows that the mortgage payment on the company’s new warehouse is due the first of every month.
Buyers who can pay more than twenty-five percent of the home’s price as a down payment can generally negotiate a lower interest rate on their mortgage.


Synonyms For Mortgage


loan, pawn, debt, credit, pledge


Cite Term


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https://payrollheaven.com/define/mortgage/
Modern Language Association (MLA):
Mortgage. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 06, 2020 https://payrollheaven.com/define/mortgage/.
Chicago Manual of Style (CMS):
Mortgage. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/mortgage/ (accessed: April 06, 2020).
American Psychological Association (APA):
Mortgage. PayrollHeaven.com. Retrieved April 06, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/mortgage/

Definition Sources


Definitions for Mortgage are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 14th February, 2020