The most common financial need that home buyers require is to be able to purchase a home. A mortgage is essentially a loan where a customer 'buys capital' (an amount of money) from an institution to be able to afford to fulfill their objective of buying a home.

 

In return for receiving this capital from the lending institution, the customer has to make regular repayments in the future until the capital (or loan capital as it is sometimes referred to) is repaid. In basic terms, therefore, this loan capital borrowed to fund the purchase of a home is called a mortgage.