Have you ever wondered where the word "Mortgage" came from? It’s actually quite interesting!

It’s a strange word when you sit down and think about it – doesn’t seem to have any apparent roots like most other words. Mind you, no one probably thinks about it being a strange word seeing as how it is so commonplace… :)

But the word does have a very interesting origination.

“Usury” which is “charging interest for a loan” was a SIN in the middle ages! Hence getting credit was pretty much impossible. But if you absolutely needed to borrow money, you could pledge your land for security of the loan. A “GAGE” is a pledge.

The lender would actually take possession of the land back in those days and get their interest through the crop yields or rent collected on the property – this is as opposed to today where the lender does not take possession, but charges interest.

When the person who pledged their land as security for the loan ultimately pays back the loan amount, then the GAGE became MORT (which means void). MORT and GAGE are words that originated in Normandy.

Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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