History of Mortgages
Mortgages are a part of our everyday lives – something we wouldn’t normally think about as far as their origin. You’d probably be surprised to learn how far back the history of home mortgages goes. But no matter how many years old this system is, the basics have never changed – the high value of real estate puts it beyond the reach of most people. So the only way to buy property is to borrow money. And that’s what they did as far back as the year 1190.

Mortgages started in “merry old England ”
The beginnings of a mortgage system have been found, as mentioned, as early as 1190. English common law included a law that would protect a creditor by giving him an interest in his debtor’s property. According to this law, the mortgage was a conditional sale. Although the creditor held title to the property, the debtor could, in the event the debt wasn’t paid, sell the property to recover his money.

The history of the actual word “mortgage” is very interesting. In the word “mortgage”, the “mort”- is from the Latin word for death and “gage” is from the sense of that word that means a pledge to forfeit something of value if a debt is not repaid. So mortgage is literally a dead pledge. It was dead for two reasons, the property was forfeit or "dead" to the borrower if the loan wasn’t repaid, and the pledge itself was dead if the loan was repaid.

The great jurist Sir Edward Coke (1552-1634) says of the word “mortgage”: It seemeth that the cause why it is called mortgage is, for that it is doubtful whether the Feoffor will pay at the day limited such summe or not, & if he doth not pay, then the Land which is put in pledge upon condition for the payment of the money, is taken from him for ever, and so dead to him vpon condition, &c. And if he doth pay the money, then the pledge is dead as to the Tenant, &c. A pretty old English way of saying the same thing, but interesting to note that the principle hasn’t changed throughout the years.

Source: History of net