"a home loan can last 30 years, but you sign up to a 2 or 3 year...

"a home loan can last 30 years, but you sign up to a 2 or 3 year contract, where you then renegoitate your next rate."
Only some sign upto short term fixed loans and those generally roll over into variable loans at the end of the fixed period.

"when you take out a mortgage a bank will want somthing it can take off you should you fail to pay."
Yeah they get the house that the mortgage was secured against. No matter what it is valued at now versus what it was valued at at the time of the loan.