A mortgage collaterized by a tenant's interest, usually structural improvements, in a leased parcel of property. A leasehold mortgage is subordinate to the landlord's land lease since it is a second lien by order of priority on the property. For example, John leases a parcel of commercial property. In order to construct a commercial office building, he obtains a leasehold mortgage to provide the necessary financing. The leasehold mortgage is subordinate to the land lease.