What is a mortgage primarily considered to be?

A mortgage is primarily considered a security for a loan. This means that it acts as collateral for the loan provided by the lender to the borrower. When a borrower takes out a mortgage, they agree to use the property being purchased as security for the loan. In the event that the borrower is unable to repay the loan, the lender has the legal right to foreclose on the property, allowing them to recover the outstanding amount by selling the property.

This definition underscores the inherent relationship between a mortgage and loan security. The transaction involves both the acceptance of a loan (often for purchasing real estate) and the legal encumbrance placed on the property as a safeguard for the lender's interests. Understanding this fundamental characteristic of a mortgage is crucial for grasping the dynamics of real estate financing and the associated risks involved.

Other options like a type of investment, a form of lease, or a financial gift do not embody the primary function of a mortgage, which is to secure the lender's investment with a specific asset—the property itself.