Loan vs Mortgage

There are two confusing nouns in the English language: a loan and a mortgage. Let me explain the difference to you.

A loan is an amount of money that you borrow from a bank because you want to buy a car, a computer etc. Examples:
Jim took out a loan to pay for his car.
It'll be years before we've paid off the loan.
a business loan / personal loan

A mortgage is a legal arrangement by which you borrow money from a bank in order to buy a house or a flat. Examples:
They've taken out a 30-year mortgage.
Mortgage rates are set to rise again in the spring.
She was having trouble meeting her mortgage payments.

TEST YOURSELF – loan or mortgage?
1. A student …......
2. Do you have a …...... on your house?
3. Kenya was still paying off a multimillion-dollar …...... to the IMF.
4. Your building society or bank will help arrange a ….......
5. Nick told me the …...... on his apartment is worth about $90,000.
6. I'll get a bank …...... if necessary.
7. The bank says we have to buy a life insurance policy before we can get a ….......
8. The organization was allowed to make …...... to private businesses.
9. I had to take out a …...... to buy my car.
10. It took my parents nearly thirty years to pay off their ….......
11. We still have a $180,000 …...... on the house.
12. Anyone taking out a …...... should be aware that interest rates can go up at any time.