Open Question: How do mortgages work?

Not to be disrespectful, but I think my parents are the most financially inept and unwise people. Ok, my dad is a lawyer, he owns a firm, I think he earns about $250,000-$450,000 per annum. Our annual expenses, to be honest are a bit on the high side considering the fact that there are 5 of us kids and we all go to private schools except the baby of course. My problem is though for one my dad doesn't save.. At least that's what my mom told me, and second for the past 6 years( since I was about 10) we've been planning to move out of the house we are currently in and have been renting for the past 13 years! What bothers me the most though is that my parents refuse to get a loan or a mortgage from the bank. My case was that if we had taken a mortgage six years ago when property was much cheaper than it is now, with his income, we would have almost finished if not already finished paying it all off, or, if he had been saving a certain percentage of his income each year from the time he started working, we wouldn't be in this situation. The game plan now is to move by the end of this year, I guess my dad has a bit of dough in the bank now cause he's looking to buy before march. The dilemma is, we had always planned about getting a much bigger space for all of us to live comfortably but due to time wasting the bigger plots are more than he can afford right now, so my parents are considering buying a smaller plot, its like going back to square one. So once again I suggest a loan to buy the bigger plot which is about $370,000 and he has $200,000 to spend, but my mum doesn't even want to hear anything of it because she feels that if we take a loan, at the end of the day we'd end up paying more than double of what we borrowed, in interest. So I want to know how loans and mortgages actually work so I can try and explain to them why it'll be a good idea before they make any decisions that I'll regret. Thanks, sorry the question is so long, I'm just venting my frustration.