A mortgage is a loan specifically used to purchase a home or other real estate, where the property itself serves as collateral. The borrower agrees to make regular payments to the lender over a set period, typically between 8 and 30 years, which include the principal amount borrowed, interest, and sometimes property taxes and homeowner's insurance. If the borrower fails to make payments, the lender has the right to repossess and sell the property to recover the outstanding debt. Mortgages can also be used to refinance properties already owned. In Saudi Arabia, mortgages are generally Shariah-compliant housing finance products like Ijara (bank leases property until paid off) and Murabaha (bank sells property to individual at a profit, paid in installments). The Saudi government is promoting affordable mortgage solutions to increase homeownership rates.
