As well, lenders charge monthly interest on collateral loans, while interest on traditional mortgages is calculated semi-annually (the more frequently interest is calculated, the more interest you pay).
That loan similarly becomes a collateral loan which can't be transferred easily, not only because it's a floating rate, but also because it's a floating balance.
Traditional mortgages are secured directly by the property, whereas collateral loans such as lines of credit are promissory notes with the property pledged as collateral.
