A loan used to buy real estate in which the real estate is collateral for the loan. Interest is typically paid monthly. In the US, the standard, plain vanilla mortgage is the thirty-year-fixed, in which the borrower makes 360 (one per month) equal payments. After that, the loan is paid off. This kind of loan has a fixed rate for the life of the loan and is amortized—that is, each payment contains some principal repayment, so that the loan balance declines to zero over time. In practice, most thirty-year borrowers pay off their loans early, usually because they sell their houses. (See also: ARM, FRM)
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