A mortgage loan is essentially an annuity held by the bank, meant to be paid out regularly, over the long term, backed by a mortgage. When most people say "mortgage", they mean "mortgage loan".
A mortgage is a lien registered against a property allowing the lendor to seize and sell the property in the event of default.
A home equity line-of-credit (HELOC) is a mortgage-backed LOC, usually at a higher rate than a mortgage loan. It is a true line of credit, in that you can borrow and pay back at any rate. The amount you can borrow is capped by the amount of equity you hold in the house (i.e. the amount of principal of the mortgage loan you have paid off.)
- House value: 450k
- Downpayment: 50k
- Original Mortgage Amount: 400k
- Current balance: 325k
Very often, the principal paid off, 75k, will automatically be converted into credit room on the LOC. That means you can borrow up to 75k at any time. (But!!!! this could mean you never pay off your mortgage loan!)