What is a mortgage?

In simple terms, a mortgage is a loan which is secured on your property. Lending institutions (banks and building societies) do not 'give mortgages'. They provide loans to home-buyers who give a 'charge' over their property to the lender. This mortgage deed is a legal contract between the borrower and the lender.

If you breach the terms of the mortgage contract (for example by defaulting on your monthly payments), the lender is empowered under the mortgage deed to apply to the Courts to take possession of the property and recover the debt. Of course, this action is only taken as a last resort.