2 Thoughts on how is a bond different than a mortgage?
  1. Reply
    muncie birder
    February 5, 2014 at 12:29 pm

    actually there is only a small amount of difference. In fact there are bonds that are called mortgage bonds. The main difference is that with a bond, the payments are made semi-annually and cover only the amount of the interest. With a mortgage (home mortgage especially), the payments are made monthly and besides interest amortize the principal of the mortgage so that at the end of the term the balance is zero. With a bond at the end of the term the amount due is the amount that was borrowed.

  2. Reply
    February 5, 2014 at 1:07 pm

    A bond is a publicly traded security issued by a corporation or government. A bond may not pay interest such as a zero coupon bond, which is bought at a discount and pays face value at maturity.

    A mortgage is a private loan between a borrower and a lender. A mortgage may be assigned to a different lender but it isnt publicly traded. However mortgages may be pooled together and securitized into a publicly traded instrument.

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