A mortgage loan is issued by a bank to allow a consumer to buy home they can’t pay for in cash. A mortgage loan is tied to
your home, so your home is the collateral for the loan, so you risk foreclosure if you fall behind on monthly payments.
Mortgages typically have the lowest interest rates of all loans and typically span 15 to 30 years. The interest
on a mortgage loan may be paid ahead of the principal with the amount of interest paid each month gradually decreasing
while the amount of principal paid gradually increasing. Since a typical
mortgage term is so long they have a very high
interest cost over the life of the loan.