A class of property that is used by borrowers who have low credit ratings: Borrowers who have subprime mortgages generally do not qualify for loans with lower rates because they have "damaged credit" or no credit history, and so they are considered untrustworthy by lending institutions.

Since the default risk for poor credit borrowers is greater than for other kinds of borrowers, lenders will normally charge a higher interest rate for subprime mortgages.