A

• Agreement in Principle (AIP) – A pre-approval from a lender, based on initial personal information and credit score assessment.

• APRC (Annual Percentage rate of Charge) – The total cost of a mortgage, reflecting both interest and fees. This figure helps a customer to accurately compare mortgage options.

• Arrangement Fee – The fee for a lender’s selected product, which may or may not apply.

• Arrears – An overdue payment on a credit agreement (e.g., if a payment has been missed).

B

• Bank of England Base Rate – Also known as the Bank Rate, this sets the interest rate for loans taken out by other banks and building societies from the Bank of England.

• Bridging Loan – A short-term loan used as temporary financing while waiting for funds from a sale or refinance.

• Buildings Insurance – Insurance coverage for a property to protect against damage.

• Buy to Let – A mortgage for a property purchased in a client’s personal name for the purpose of renting out.

C

• CCJ (County Court Judgement) – Legal action taken against a borrower by a creditor.

• Commercial Mortgage – A mortgage for a property used for commercial purposes (e.g., a shop, warehouse or office).

• Conveyancing – The legal transfer of a property ownership from one person to another and granting of debt security.

D

• Debt to Income Ratio – A measure of a person’s debt relative to their income.

• Deposit – The amount of money paid upfront for a property purchase.

• Desktop Valuation – A property valuation conducted online using existing data without a physical inspection.

• Discounted Variable Rate – A variable rate set as a discount on the lender’s specific variable rate for a set period.

E

• Early Repayment Charge – The fee for redeeming the mortgage before the initial benefit period ends, typically a percentage of the outstanding loan.

• Equity – Portion of the property owned without debt.

• Equity Release Mortgage – A loan that allows homeowners aged 55+ to borrow money based on the value of their home while continuing to live there.

• ESIS (European Standardised Information Sheet) – An illustration that breaks down all mortgage product terms

• Exchange of Contracts – An exchange contracts with the vendor’s solicitor, after which, you are formally and legally bound to purchase the property.

F

• Fixed Rate – Set rate for a pre-agreed period, typically 2-5 years

• Flying Freehold – Freehold that overhangs or underlies another freehold, usually a room over common area (e.g., a common passageway/driveway).

• Formal Offer – A legally binding offer following underwriting and valuation. This is a formal agreement from the lender to lend.

• Freehold – A form of ownership, if you own the freehold to a property, you own everything from bricks, mortar and land.

G

• Ground Rent – A fee for leaseholders payable to the freeholder for shared spaces such as lifts, hallways and communal gardens.

H

• HMO (Houses in Multiple Occupation) – A property rented to 4 or more unrelated tenants.

I

• Interest-Only Mortgage – A type of mortgage where you only pay the interest, the total debt will remain outstanding at the end of the term.

• Islamic Mortgage – A mortgage under the terms of Sharia law that is not technically considered as a mortgage. it is a structured financial product that removes interest therefore, is respecting the religious rules of Islam that prevent interest.

• IVA (Individual Voluntary Arrangement) – A court-approved debt repayment plan

J

• Joint Borrower Sole Proprietor – A scheme similar to a guarantor, which allows an applicant to be on the mortgage to increase affordability for the property owner, but is not be listed as a property owner on the deeds.

L

• Land Registry – The official body responsible for maintaining property ownership.

• Leasehold – A form of property ownership where you own the property but not the land it is built upon. The freeholder owns the land, and you are leased the property for a set term (length of lease).

• Legal Completion – The moment when official completion takes place and you officially become the property owner.

• Let to Buy – The process of letting out a property and raising equity from that property to fund the deposit to buy another property for owner occupation.

• Limited Company Buy to Let Mortgage – A mortgage for a property purchased in the name of the company with the intention of letting it out.

• Loan to Value – The percentage calculation of mortgage value against the property value.

M

• Mortgage Deed – A legal document giving a lender rights to your property.

• Mortgage Term – The total length of an agreed mortgage period.

N

• New Build – A building that was constructed within the past 10 years.

• New Build Warranty – A warranty to ensure the build was completed correctly, typically in place for the first 10 years.

O

• Offset Mortgage – A mortgage that allows for savings to offset mortgage interest. For example, if you have a mortgage balance of £200,000 and £100,000 in savings in a linked offset saver account, you only pay interest on the £100,000 that is not offset.

• Overpayment Facility – The amount you can overpay without incurring penalties.

P

• Part Interest-Only, Part Repayment Mortgage – A combination of interest-only repayment mortgage with two parts to the mortgage.

• Porting – The process of moving your current mortgage from one property to another, avoiding early repayment charges.

• Product Transfer – The process of switching to a new mortgage product with your current lender.

R

• Regulated – A mortgage contract for a property to be lived in by you or your family, with the loan purpose not primarily for business.

• Remortgage – The process of moving from one lender to another.

• Repayment Mortgage – Monthly payments go toward both interest and debt capital.

• Repossession – Lender takes possession of a property due to defaulted payments.

• Residential Mortgage – A loan for personal use of a residential property.

• Right to Buy – A scheme allowing council tenants to buy their homes at a discounted rate.

S

• Second Charge – A second loan taken against the property, with a lower priority for repayment than the first loan.

• Self-Build Mortgage – A loan for building a property, released in stages based on the progress of construction.

• Service Charge – Monthly fee for building upkeep by a managing agent for flats.

• Share of Freehold – Owning the share of a property’s freehold through a Limited Company. Each share of freehold will have an underlying lease.

• Shared Ownership – A government-backed scheme, allowing you to purchase a percentage share of a property with rent payable on the non-purchased portion.

• SPV (Special Purpose Vehicle) – A company created for holding/owning property.

• Stamp Duty – Tax paid to HMRC upon property purchase, based on the property value.

• SVR (Standard Variable Rate) – A standard rate set by the lender to be their standard that mortgages will move onto after the initial fixed or tracker period ends.

• Survey – A detailed valuation of the property to identify major/minor defects.

• SWAP Rates – A forward contract to exchange one stream of future interest payments for another based on a specified principal amount.

T

• Tracker Rate – An interest rate tied to the Bank of England base rate for a set period at a fixed margin.

U

• Unregulated – A mortgage for a property not lived in by the borrower or family and is solely for business purposes.

V

• Valuation – An evaluation of a property’s value and condition for lending purposes.

For more information or support, please do not hesitate to contact our specialist team of advisers.

Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.