When a Jєω provides you with a mortgage, not only does the Jєω secure his investment with the collateral of the home (and homes tend to appreciate) AND charge you thousands in "closing fees" and sometimes even make you pay for "mortgage insurance" (generally if you have < 20% equity in the home), but they ALSO make inordinate amounts of money in excess of the home's value.  If you take out a mortgage on a $250,000 home, you'd end up paying about $750,000 by the end of 30 years.  That is gravely sinful usury.  They should be making their salaries from the fees

So a non-usurous home "loan" would entail a few hundred dollars worth of closing costs and fees, a monthly servicing fee (probably no more than $50 per month, since it's nearly all electronic and automated), and a certain amount of mortgage insurance (probably no more than $200, depending on your credit "risk"), along with principle payments.  If the home needed to be foreclosed upon, the home should be sold for market value, and the bank should have only as much stake in the property as would cover the amount of remaining principle, while the mortgagee would receive as much of the principal he paid into it, minus any fees/costs associated with the foreclosure itself.

I am going to pull out some quotes from the above link (and also from other pages on the blog).
The principal is you buying the bank's share of the house over time. The interest is the rent you pay for the part of the house that the bank owns. Sure it might be unethical or immoral the way the current system works. But whether is it usurious will depend on if it is 'mutuum' (according to the blog guy).

Another quote from the same page

) Is it morally licit to charge interest on a full recourse loan just to cover inflation?
No. The answer is implicit in Question 35 — once you’ve grasped the difference between mutuum and societas it becomes clear that the price of the ‘currency’ most likely will fluctuate all over the place relative to other things, whatever is used as currency. The mutuum might be in wheat or oranges or even computers or cars as opposed to dollars; but that doesn’t change the nature of the contract.
So if it is an interest bearing mutuum it is usury, and the inflation rate (or price fluctuation between commodities or currencies generally) is irrelevant.
In effect what the “just-to-cover-inflation” usurer is attempting to do is enslave the borrower (as opposed to purchasing claims against some actually existing property) as an inflation hedge. All property is subject to entropy, decay, devaluation, theft, political unrest, changes in market conditions or personal circuмstances, and other risks. It is fine generally speaking to make investments as a hedge against this, in an effort to preserve wealth; but it is not morally licit to make usurious loans as a hedge against this.
[Some folks have found this approach to the answer confusing, so I answered it again from a slightly different perspective in Question 53]

I am going to pull out some quotes from the above link (and also from other pages on the blog).
The principal is you buying the bank's share of the house over time. The interest is the rent you pay for the part of the house that the bank owns. Sure it might be unethical or immoral the way the current system works. But whether is it usurious will depend on if it is 'mutuum' (according to the blog guy).

That makes sense.  I'd never thought of it that way before.  If you weren't paying a mortgage, you'd just be paying rent, which would be as much or more than the mortgage payment, and at the end of the mortgage term, you have a house, whereas when you pay rent, at the end of 30 years you just have 360 cancelled checks.  And lenders, unless they hold the loans in-house, aren't making any money off the interest (aside from service fee as noted above), they pass that on to the investor (e.g., FNMA mortgage security holders).

I can tell you that lenders do NOT want to foreclose, in actual practice, they will bend over backwards to do everything to accommodate a delinquent borrower.  Foreclosure can take a year or more, and when a lender ends up with a house, nobody wins (unless it would be someone who gets it for a song at a foreclosure sale).  They typically work with borrowers to bring them current, or to recast the loan into something that the borrower can pay.  They're not Simon Legrees rubbing their hands together and just lying in wait to snatch someone's house away from them.

I've seen more loans than I can count, made to people who clearly couldn't afford the homes, nor make the payments, for various reasons including social equity and avoidance of even the appearance of discrimination.  Political correctness plays a huge factor in credit decisions.

In Australia having a mortgage is cheaper than renting. Renting prices are insane.

For example one way to think about a non recourse “loan” (and you will see some folks discuss it under this kind of framing) is to think of it as a mutuum together with an additional contract. This “add on” contract removes the personal pledge for repayment and replaces it with a pledge to transfer ownership of specific property if the borrower stops making payments: thus we get a non recourse loan. It is from this second, add-on contract, which grants the lender an ownership interest in the collateral and cancels the borrower’s personal obligation to repay, that a just title to profit arises.

However when the terminology is used that way – when the most essential property of a mutuum (Aquinas: “the borrower holds the money at his own risk and is bound to pay it all back”) is removed and replaced by a pledge of actually existing property which fully bounds and terminates the borrower’s obligation – it is editorially more clear to just recognize that what we have is an essentially different kind of contract. These kinds of contracts in fact have their own names: a census (See Question 31) or non recourse mortgage (see the full citation of “Usury and Contract for Rent” from Regimini Universalis), along with explicit approval by the Magisterium as non-usurious when non recourse.