Difference Between Mortgage & Lien


Mortgage is the type of loan that a customer borrows from the bank to buy or renovate a house, land, or another type of property. These properties will be used as collateral to secure the loan.

The bank or creditor will reserve the right to prevent the owner from selling the property without their acknowledgment. The hard title usually keeps with them to prevent such a case from happening.

The mortgage will enable the customer to buy a house or property without paying the full amount upfront. They simply borrow the loan from the bank to purchase a house and pay it back to the bank base on the schedule. The mortgage usually requires the customer to pay a certain percentage of the house’s price in order to apply for the loan.

The loan term of the mortgage will difference and it will impact to the interest rate.


Lien is the legal claim that bank or creditor go against the assets that are used as the collateral of the loan.

It happens when the borrowers are not able to pay back the loan. So banks or creditors will require to seize and sell the assets to get back the loan. It is a protection that creditors get when offering a loan to customers, it will help to ensure that customers will pay back their cash otherwise they will lose their property.

Lien also helps the customers to obtain the loan with a lower interest rate as it considers a low risk for the bank. So the bank will be highly likely to accept lower returns as well.

Difference between Mortgage & Lien

Mortgage Lien
Is a type of loan that customers take from bank or creditor. It is not a loan, just a type of claim that creditors have over the customer assets when they fail to complete a certain obligation.
Mortgage is the type of loan that consists of lien that gives the right to creditors to claim borrowers’ assets when they fail to pay back the loan. Not all liens are mortgages. For example, the government can claim the asset of its citizens when they do not pay the tax.
Mortgagee is the person who lends money to the borrower. Lienholder is the person who has the right to claim borrowers’ assets.