A
- AIP (Agreement in Principle)
- A statement from a lender showing how much they might lend you, based on an initial assessment, before you make a full application.
- APR (Annual Percentage Rate)
- The total cost of a mortgage over its term expressed as a yearly percentage, including interest and standard fees.
- Arrangement Fee
- A fee charged by the lender for setting up a mortgage, which can often be added to the loan or paid upfront.
- Affordability Assessment
- A lender's check of your income, outgoings and commitments to confirm you can afford the mortgage repayments.
- Adverse Credit
- A credit history that includes missed payments, defaults, CCJs or bankruptcy, which some specialist lenders can still consider.
B
- Buy-to-Let (BTL)
- A mortgage for a property you intend to rent out rather than live in, assessed mainly on rental income.
- Base Rate
- The Bank of England's official interest rate, which tracker and many variable mortgage rates move in line with.
- Bridging Loan
- Short-term finance used to "bridge" a gap, such as buying a new property before your current one sells.
- Buildings Insurance
- Cover for the structure of a property against damage from fire, flood, storm and similar risks — usually a lender's requirement.
C
- Completion
- The final legal step in a property purchase, when ownership transfers and the mortgage funds are released.
- Conveyancing
- The legal process of transferring property ownership, handled by a solicitor or licensed conveyancer.
- Credit Score
- A number representing your credit history, used by lenders alongside their own criteria to assess risk.
- CCJ (County Court Judgment)
- A court order made against someone who owes money and has not repaid it, which can affect mortgage eligibility.
- Capital Repayment
- The portion of a mortgage payment that reduces the amount you originally borrowed, as opposed to interest.
D
- Deposit
- The amount you contribute towards a property purchase upfront, with the mortgage covering the rest.
- Decision in Principle
- See AIP (Agreement in Principle) — some lenders use this term instead.
- Disbursements
- Costs a solicitor pays on your behalf during conveyancing, such as search fees and Land Registry fees.
E
- ERC (Early Repayment Charge)
- A fee some lenders charge if you repay your mortgage, in full or in part, before the end of a fixed or discounted period.
- Equity
- The difference between your property's value and the amount you still owe on your mortgage.
- Equity Release
- A way for homeowners, typically aged 55+, to release cash tied up in their property without moving out.
- Exchange of Contracts
- The point at which a property purchase becomes legally binding, ahead of completion.
F
- Fixed Rate
- A mortgage interest rate that stays the same for an agreed period, giving predictable monthly payments.
- First-Time Buyer
- Someone purchasing their first home, who may be eligible for certain schemes or better rates.
- Freehold
- Outright ownership of a property and the land it stands on, with no time limit.
G
- Gifted Deposit
- Money given, rather than lent, by a family member to help fund a deposit — lenders usually require a signed declaration.
- Guarantor Mortgage
- A mortgage where a family member agrees to cover repayments if the borrower cannot, often used to boost affordability.
H
- Help to Buy
- A government scheme (regionally variable and now largely closed to new applicants) that helped buyers purchase with a smaller deposit.
- HMO (House in Multiple Occupation)
- A property let to three or more unrelated tenants sharing facilities, which needs a specific type of mortgage.
I
- Interest-Only Mortgage
- A mortgage where monthly payments cover only the interest, with the capital repaid separately at the end of the term.
- Income Protection
- Insurance that replaces part of your income if you're unable to work due to illness or injury.
- Indemnity Insurance
- A one-off policy protecting against a specific legal defect or risk identified during conveyancing.
L
- LTV (Loan to Value)
- The size of your mortgage as a percentage of the property's value — a lower LTV usually means better rates.
- Leasehold
- Ownership of a property for a fixed term under a lease, while someone else (the freeholder) owns the land.
- Lender
- The bank, building society or specialist provider that lends you the mortgage.
- Life Insurance
- A policy that pays out a lump sum or income to your family if you die during the policy term, often used to cover a mortgage.
M
- Mortgage in Principle
- See AIP (Agreement in Principle).
- Mortgage Term
- The length of time, usually in years, over which you agree to repay your mortgage.
- MIP
- Shorthand some lenders use for Mortgage in Principle — see AIP.
N
- Negative Equity
- A situation where your property is worth less than the outstanding mortgage balance.
O
- Offer Letter
- A formal document from the lender confirming the mortgage amount, rate and conditions once underwriting is complete.
- Overpayment
- Paying more than your required monthly amount to reduce the mortgage balance and term faster, subject to lender limits.
P
- Porting
- Transferring your existing mortgage deal to a new property when you move, instead of taking out a new one.
- Product Fee
- See Arrangement Fee.
- Protection Insurance
- An umbrella term covering life insurance, critical illness cover and income protection.
R
- Remortgage
- Switching your mortgage to a new deal, either with your current lender or a new one, without moving home.
- Redemption Statement
- A document showing exactly how much is needed to pay off your mortgage in full on a given date.
- Repayment Mortgage
- A mortgage where each payment covers both interest and some of the capital, so the balance reduces to zero by the end of the term.
- Retention
- An amount a lender holds back from the mortgage funds until certain repair works are completed.
S
- SVR (Standard Variable Rate)
- The lender's default interest rate, usually applied after a fixed, tracker or discounted period ends.
- Shared Ownership
- A scheme where you buy a share of a property (typically 25–75%) and pay rent on the remainder.
- Stamp Duty (SDLT)
- A tax paid on property purchases above a certain price threshold in England and Northern Ireland.
- Survey
- An inspection of a property's condition and value, ranging from a basic valuation to a full structural survey.
- Self-Employed Mortgage
- A mortgage assessed using accounts, tax calculations (SA302) or accountant references rather than payslips.
T
- Tracker Rate
- A variable rate that moves directly in line with a base rate (usually the Bank of England base rate) plus a set margin.
- Title Deeds
- Legal documents proving ownership of a property, now typically held electronically by the Land Registry.
U
- Underwriting
- A lender's detailed assessment of your application, income, credit history and the property before issuing a formal offer.
V
- Valuation
- A lender's assessment of a property's value to confirm it supports the mortgage amount requested.
W
- Whole-of-Market Broker
- A mortgage broker who can access deals from across the entire lending market, rather than a limited panel.
Y
- Yield (Rental Yield)
- A buy-to-let property's annual rental income expressed as a percentage of its value or purchase price.
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