A mortgage is simply a loan agreed to by a lender in order to buy a property.
A rate of interest is charged on the balance outstanding and a monthly payment calculated that the customer needs to pay in order not to be in breach of the mortgage conditions. Should this not be paid on time and in full each month, the lender often has the right to add penalties, remove discounts or even take legal action to repossess the property, although this action is only taken by the lender as a last resort. When repossession does take place, the property is sold in by the lender in order to cover the mortgage account outstanding at that time. They can do this because they take a 'legal charge' on the property when the loan is taken out. Hence the term Your home may be repossessed if you do not keep up repayments on your mortgage.