A mortgage is a type of loan that is used to purchase another asset such as land, gold etc.. The property itself is used as collateral for the loan, which means that if the borrower fails to repay the loan, the lender can take possession of the property.

Example:
Imagine Rahul goes and buys a watch and it costs him 4000. He asks his friend to lend him 4000 to buy the watch. In this case the friend can take away the watch in case Rahul is unable to repay the amount within the decided time period.