A mortgage is a loan that is secured against a property. The property is usually a house, bungalow or flat. Being secured against the property means that should you fall behind with your mortgage repayments then the bank or building society can repossess the property to recover the debt, mortgage arrears and perhaps some costs.
Chances are that now is the time you are thinking about purchasing a property and you probably don't have enough money in the bank to pay for it in full. For example, let's say you can afford to put down a deposit of 10% on a property you would like to buy for £100,000. Therefore you have a deposit of £10,000 and need another £90,000 in order to complete your purchase and this is where a mortgage comes in. Together with your deposit you are now able to pay the seller in full for the property and you pay back the loan, interest and costs to the bank, building society or specialist mortgage lender.
If you change lender for an existing mortgage that you already have without changing the property it is secured against it is referred to as a 'remortgage'.
The word mortgage originates from the French words mort meaning death, and gage meaning a pledge. Although this sounds as though you should expect to die in the event of not paying your mortgage it simply means that in the event of falling behind on your mortgage repayments your entitlement to the property ceases.