Since 1992
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By Barbara McAllister
Word of the Day: Mortgage
You might think twice about taking on a mortgage if you know what the word means in French. The French “mort” means death and “gage” means pledge. A mortgage is literally “a death pledge.” It might make you think twice when you apply for one. While it sounds ominous, the original meaning of the word signified that the debt became dead when the obligation or pledge was fulfilled, not the mortgagor. The earliest use of the word mortgage referred to marriage, not a home loan. While that also sounds like an ominous prospect for newlyweds, the word wedding is from the Old English that meant “to pledge oneself.”
Despite the French origin, mortgages aren’t as common in France as they are in other countries. French mortgages make up just 25% of the country’s gross domestic product, where American mortgages equal more than twice that. In the United States, the vast majority of homebuyers rely on a mortgage to finance 90% of the cost of their home. Before the Great Depression, mortgages were completely private and for less than five years. Homeowners would string refinances one after another. The Great Depression resulted in record numbers of foreclosures, which lead to governmental regulations stepping in to change practices and protect borrowers. In the US, mortgage
Terms are now typically 30 years, which may be why the custom of mortgage burning to celebrate freedom from debt is increasingly rare. Scottish homeowners avoid a fire hazard once the mortgage is paid off, typically marking the occasion by painting the front door red and, presumably, the town.
