Every mortgage is a loan, but not every loan is a mortgage. A mortgage is specifically for buying property and uses that property as security; a loan is the general word for any borrowed sum, from a car loan to a quick loan from a friend.
The core difference
A mortgage is a property-specific loan secured against the property itself, while loan is the general term for any borrowed sum.
- mortgage — a loan used to buy property, where the property itself is used as security for the debt: They took out a 25-year mortgage to buy their first house.
- loan — a sum of money lent to someone on the understanding it will be paid back, often with interest: They took out a loan to buy their first car.
How to tell them apart
The clearest test is the security behind the borrowing. With a mortgage, the property being bought is the security: fail to keep up repayments and the lender can ultimately take the property. Other loans, such as a car loan or personal loan, may or may not be secured against something, but the word "mortgage" is reserved specifically for property.
The word itself hints at the seriousness of that arrangement — mortgage comes from an old term meaning "dead pledge", because the deal ends either when the debt is paid off or when the property is taken.
