Pledge vs. Mortgage — What's the Difference?

The physical delivery of an asset to secure a debt.

A legal agreement using real estate as collateral for a loan.

A security interest where movable property is given as collateral.

Primarily used for real estate financing.

The lender has the right to sell the collateral if the borrower defaults.

Long-term financial commitment, often spanning decades.

It involves movable assets like vehicles, stocks, or jewelry.

The borrower retains possession of the property.

Used for various types of obligations, not limited to loans.

Involves a complex legal process, including foreclosure for enforcement.

A solemn promise or undertaking

A legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt

A thing that is given as security for the fulfilment of a contract or the payment of a debt and is liable to forfeiture in the event of failure

Convey (a property) to a creditor as security on a loan

The drinking of a person's health; a toast.

A loan for the purchase of real property, secured by a lien on the property.

Commit (a person or organization) by a solemn promise

The document specifying the terms and conditions of the repayment of such a loan.

Give as security on a loan

The repayment obligation associated with such a loan

Drink to the health of

The right to payment associated with such a loan

A solemn binding promise to do, give, or refrain from doing something

The lien on the property associated with such a loan.

Something given or held as security to guarantee payment of a debt or fulfillment of an obligation.

To pledge (real property) as the security for a loan.

The condition of something thus given or held

To make subject to a claim or risk; pledge against a doubtful outcome

Delivery of goods or personal property as security for a debt or obligation

(legal) A special form of secured loan where the purpose of the loan must be specified to the lender, to purchase assets that must be fixed (not movable) property, such as a house or piece of farm land. The assets are registered as the legal property of the borrower but the lender can seize them and dispose of them if they are not satisfied with the manner in which the repayment of the loan is conducted by the borrower. Once the loan is fully repaid, the lender loses this right of seizure and the assets are then deemed to be unencumbered.

The contract or transaction stipulating or involving such delivery.

(obsolete) State of being pledged.

A token or sign

To borrow against a property, to obtain a loan for another purpose by giving away the right of seizure to the lender over a fixed property such as a house or piece of land; to pledge a property in order to get a loan.

A person who has been accepted for membership in a fraternity or similar organization and has promised to join but has not yet been initiated.

To pledge and make liable; to make subject to obligation; to achieve an immediate result by paying for it in the long term.

A vow to abstain from alcoholic liquor

A conveyance of property, upon condition, as security for the payment of a debt or the preformance of a duty, and to become void upon payment or performance according to the stipulated terms; also, the written instrument by which the conveyance is made.

(Archaic) The act of drinking in honor of someone; a toast.

State of being pledged; as, lands given in mortgage.

To offer or guarantee by a solemn binding promise

To grant or convey, as property, for the security of a debt, or other engagement, upon a condition that if the debt or engagement shall be discharged according to the contract, the conveyance shall be void, otherwise to become absolute, subject, however, to the right of redemption.

To bind or secure by a pledge or promise

Hence: To pledge, either literally or figuratively; to make subject to a claim or obligation.

To deposit as security; pawn.

A conditional conveyance of property as security for the repayment of a loan

To promise to join (a fraternity or similar organization).

Put up as security or collateral

To accept as a prospective member of such an organization.

(Archaic) To drink a toast to.

To make a solemn binding promise; swear.

(Archaic) To drink a toast.

To make a solemn promise (to do something).

To deposit something as a security; to pawn.

(transitive) To give assurance of friendship by the act of drinking; to drink to one's health.

A solemn promise to do something.

A promise to abstain from drinking alcohol.

An asset or person temporarily handed over to guarantee the fulfilment of something promised, under threat of permanent loss of the thing handed over; surety, security, hostage.

(law) A bailment of personal property to secure payment of a debt without transfer of title.

The personal property so pledged, to be kept until the debt is paid.

(college slang) A person who has taken a pledge of allegiance to a college fraternity, but is not yet formally approved.

A drinking toast.

The transfer of possession of personal property from a debtor to a creditor as security for a debt or engagement; also, the contract created between the debtor and creditor by a thing being so delivered or deposited, forming a species of bailment; also, that which is so delivered or deposited; something put in pawn.

A person who undertook, or became responsible, for another; a bail; a surety; a hostage.

A hypothecation without transfer of possession.

Anything given or considered as a security for the performance of an act; a guarantee; as, mutual interest is the best pledge for the performance of treaties.

A promise or agreement by which one binds one's self to do, or to refrain from doing, something; especially, a solemn promise in writing to refrain from using intoxicating liquors or the like; as, to sign the pledge; the mayor had made no pledges.

A sentiment to which assent is given by drinking one's health; a toast; a health.

To deposit, as a chattel, in pledge or pawn; to leave in possession of another as security; as, to pledge one's watch.

To give or pass as a security; to guarantee; to engage; to plight; as, to pledge one's word and honor.

To secure performance of, as by a pledge.

To bind or engage by promise or declaration; to engage solemnly; as, to pledge one's self.

To invite another to drink, by drinking of the cup first, and then handing it to him, as a pledge of good will; hence, to drink the health of; to toast.

A deposit of personal property as security for a debt;

Someone accepted for membership but not yet fully admitted to the group

A drink in honor of or to the health of a person or event

A binding commitment to do or give or refrain from something;

Promise solemnly and formally;

Pay (an amount of money) as a contribution to a charity or service, especially at regular intervals;

Propose a toast to;

Give as a guarantee;

Bind or secure by a pledge;

Yes, mortgages can finance various types of real estate, including commercial properties and land.

Movable assets such as jewelry, stocks, or vehicles can be used as collateral in a pledge.

While possible, pledges are more commonly used for securing short-term loans due to the need for physical possession of the collateral.

If you default on a pledged loan, the lender has the right to sell the pledged asset to recover the debt.

Assets that cannot be physically delivered or are not easily transferable, such as intangible assets, are generally not suitable for pledges.

Defaulting on a mortgage can lead to foreclosure, damaging your credit score and resulting in the loss of the property.

A pledge involves transferring possession of collateral, whereas a lien is a legal right or claim against an asset to secure a debt, without transferring possession.

Yes, borrowers typically live in or use the mortgaged property while making loan payments.

No, in a pledge, the lender typically takes possession of the asset, meaning you cannot use it until the loan is repaid.

Foreclosure is a legal process where the lender seeks to take possession of and sell the mortgaged property to recover the unpaid loan amount.

Mortgages involve several legal documents, including a loan agreement, a mortgage or deed of trust, and possibly a promissory note.

Yes, but it requires consent from the existing lender(s), and subsequent mortgages are subordinate to the first.

The borrower retains ownership of the property, but the lender has a security interest in it until the loan is fully repaid.

Yes, refinancing is a common practice with mortgages, allowing borrowers to adjust loan terms or interest rates.

The amount you can borrow with a mortgage is typically determined by the value of the property, your income, credit history, and other debt obligations.