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Mortgages glossary


  • AER

    The Annual Equivalent Rate is the rate of interest you should receive on savings – as long as you don't withdraw money from the account.More...

  • APR

    The Annual Percentage Rate is the true cost of borrowing.More...

  • Bad credit mortgages

    A bad credit mortgage, also known as a non-conforming mortgage, is a loan secured against the value of a property designed for people with poor credit histories.More...

  • Building Society

    A building society is a financial organisation that is owned by its members, and not shareholders.More...

  • Buy to let mortgages

    A buy-to-let mortgage is a loan secured against a property, where the borrower intends the property to be rented to tenants rather than as their residence.More...

  • Capped rate mortgages

    A capped rate mortgage is a loan secured against a property where the level of interest charged has a ceiling.More...

  • Cashback mortgages

    A cashback mortgage is a loan secured on a property which offers a cash rebate when the purchase is completed.More...

  • Commercial mortgages

    A commercial mortgage is a loan taken out to help fund the purchase of land or buildings that will be used for business purposes.More...

  • Discount rate mortgages

    A discount rate mortgage is a home loan secured against a property where the cost of repayments is reduced for a fixed term.More...

  • Endowment mortgages

    Endowment mortgages use investment funds to pay off the value of the loan - rather than the mortgage-holder paying off the debt directly.More...

  • Equity Release

    Equity release is a way for older homeowners to access some of the value of their home without having to make repayments or move house.More...

  • Fixed rate mortgages

    A fixed rate mortgage is a loan secured against the value of a property where the interest charged by the lender is fixed.More...

  • Flexible mortgages

    A flexible mortgage is a loan secured against a property with more freedom in payment schedules than a standard mortgage.More...

  • Foreclosure

    Foreclosure is the process by which a property owner gives up their home to their mortgage lender if they fail to keep up with their repayments.More...

  • Higher Lending Charge

    A higher lending charge is levied by some mortgage lenders on people looking to take out a loan worth more than 90 per cent of the value of the property - although they can come into effect for loan to value (LTV) ratios as low as 75 per cent.More...

  • Home reversion plans

    Home reversion plans offer consumers the chance to access some of the value of their homes by selling some or all of their property to a third party.More...

  • Income multiples

    Most commonly associated with mortgages, an income multiple is the standard measure whereby lenders use a person's earning to calculate how much money they are prepared to lend to them.More...

  • Interest only mortgages

    An interest-only mortgage is a loan secured against the value of a property that is not designed to be paid off.More...

  • Interest rate

    Interest rates are effectively the 'rental' cost of money.More...

  • Intermediary (mortgage, insurance, loan)

    An intermediary is person or organisation that brings two groups together, for example borrowers and lenders, and for a fee, aids in negotiating terms.More...

  • Lifetime mortgages

    Lifetime mortgages are a way for older homeowners to access some of the value of their home without having to make repayments or move house.More...

  • Lifetime tracker mortgages

    A lifetime tracker mortgage is a loan secured against the value of a home whose costs are guaranteed to stay within a fixed percentage of the UK’s underlying cost of borrowing.More...

  • LTV (Loan to Value Rate)

    The LTV (Loan to Value Rate) is the proportion of the value of an asset that a loan makes up.More...

  • Mortgage insurance

    There are a series of insurance products that go with mortgages.More...

  • Mortgage penalty clause/lock ins

    A mortgage penalty clause, also known as a ‘lock in’, is a charge that lenders attach to loans secured against the value of a property.More...

  • Muslim finance

    Muslim finance products allow the UK’s two million Muslims to benefit from mortgages, bank accounts and child trust funds, which would normally go against their faith.More...

  • Negative Equity

    Negative equity occurs when the amount of money that owed to a mortgage lender on a property is greater than the amount of money that could be made by selling it.More...

  • Offset mortgages

    Offset mortgages are loans secured against a property that take any money in a customer's savings and current accounts away from the value of the loan.More...

  • Remortgages

    A remortgage is the process of replacing an existing home loan with a new one.More...

  • Repayment mortgages

    A repayment mortgage is a loan secured against the value of a property which is paid back in instalments.More...

  • Self build mortgages

    A self build mortgage, also known as a stage payment mortgage, is a specialist way of taking out a loan on a house that is not built yet.More...

  • Self cert mortgages

    Self certification mortgages (self cert mortgages) are loans secured against the value of a property.More...

  • Standard variable rate

    A lender’s standard variable rate is the rate a lender charges its customers on loans - particularly mortgages.More...

  • Tracker mortgages

    A tracker mortgage is a loan secured against a property where the interest charged is guaranteed to maintain a set relationship with, or "track", Bank of England base rate.More...

  • Variable rate mortgages

    Variable rate mortgages are loans secured against the value of a property where the interest charged by the lender can vary.More...

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