A
- Affordability Assessment
A check by a lender to ensure you can afford the mortgage repayments based on your income, outgoings, and financial commitments.
- Agreement in Principle (AIP)
A conditional offer from a lender stating how much they’re willing to lend you, subject to further checks.
- Annual Percentage Rate of Charge (APRC)
Shows the total cost of a mortgage, including interest and fees, expressed as an annual percentage.
B
- Base Rate
The interest rate set by the Bank of England, influencing how lenders set their own rates.
- Broker Fee
The fee charged by a mortgage broker for finding and arranging a mortgage on your behalf.
C
- Capital
The amount of money borrowed on a mortgage (excluding interest).
- Completion
The final stage of the property purchase when the ownership transfers to the buyer.
- Conveyancing
The legal process of transferring property ownership from the seller to the buyer.
- Credit Report
A summary of your financial history used by lenders to assess your creditworthiness.
D
- Decision in Principle (DIP)
Similar to an AIP, it’s an indication from a lender on how much you could borrow, subject to detailed checks.
- Deposit
The initial amount of money you pay towards the property, with the remainder covered by a mortgage.
E
- Early Repayment Charge (ERC)
A fee charged by lenders if you repay your mortgage or overpay beyond a set limit during a fixed period.
- Equity
The difference between the value of your property and the amount owed on your mortgage.
F
- Fixed-Rate Mortgage
A mortgage where the interest rate is fixed for a specific period, providing predictable payments.
- Freehold
Owning the property and the land it stands on outright, with no lease.
G
- Guarantor
A person who agrees to cover your mortgage payments if you’re unable to.
H
- Help to Buy Scheme
A government initiative to help first-time buyers purchase a property with a smaller deposit.
I
- Interest-Only Mortgage
A mortgage where you only pay the interest each month, with the capital repaid at the end of the term.
- Income Multiples
Lenders use this to calculate how much they’ll lend, based on a multiple of your annual income.
L
- Loan-to-Value (LTV)
The ratio of the loan amount to the property’s value, expressed as a percentage.
- Leasehold
Ownership of a property for a set period but not the land it stands on.
M
- Mortgage in Principle
Another term for an AIP or DIP.
- Mortgage Term
The length of time over which the mortgage is to be repaid, typically 25–30 years.
O
- Offset Mortgage
A mortgage that allows you to offset savings against your mortgage balance, reducing interest costs.
P
- Product Fee
A one-time fee charged by lenders for certain mortgage products, often added to the loan.
- Portable Mortgage
A mortgage that can be transferred to a new property if you move.
R
- Remortgage
Switching your existing mortgage to a new lender or product, often to get a better rate.
- Repayment Mortgage
A mortgage where you pay both the interest and a portion of the capital each month.
S
- Stamp Duty Land Tax (SDLT)
A tax paid when purchasing property over a certain price threshold in England and Northern Ireland.
- Standard Variable Rate (SVR)
A lender’s default interest rate that applies when your fixed or introductory deal ends.
T
- Tracker Mortgage
A mortgage where the interest rate follows the Bank of England’s base rate, plus a set percentage.
- Title Deeds
Documents that prove ownership of a property.
U
- Underwriting
The process where lenders assess your application and financial situation before approving a mortgage.
V
- Valuation
An assessment of a property’s value, usually conducted by the lender to confirm it’s worth the amount being borrowed.
Y
- Yield
A calculation used by landlords to determine the return on a property investment, often expressed as a percentage.
Z
- Zero Deposit Mortgage
A mortgage product that doesn’t require a deposit, typically for shared ownership or guarantor mortgages.