“Mortgage”, “Mortgage Bond” and “Home Loan”: What’s the Difference?
Derived from French “mort” and “gage” (literally “dead pledge” because it “dies” when settled), a mortgage secures a creditor’s claim and enables it to sell the bonded property if the debtor defaults in repaying the debt.
In the context of a home loan, strictly speaking, “mortgage” refers to the mortgage bond agreement and to the bond registered over the property. The home loan agreement is separate – it sets out the details of the loan and the terms of repayment and it could be for a different amount. We tend to use the terms “mortgage”, “mortgage bond”, and “home loan” interchangeably – but it can be important to understand the distinction in a particular legal context. If in any doubt, ask us!
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