Glossary of Mortgage Phrases

Further Safety Charge

An Further Safety Charge (Mortgage Indemnity Assure coverage) is the charge taken to get an insurance coverage coverage that may cowl your lender in order that if you happen to default on funds, he is not going to undergo any loss. It’s a must to pay the Further Safety Charge and the premium alongside along with your mortgage advance. Though you’re paying the premium, do not forget that this coverage is for the safety of your lender and never for you.

Administration Charge

The administration charge is the quantity charged by your lender to start out engaged on the documentation a part of your mortgage utility. It contains the house valuation charge as nicely. The administration charge is not going to be refunded even when your valuation isn’t executed or in case your utility has been rejected.

Antagonistic Credit score

Antagonistic credit score happens when you may have a historical past of spotty credit, chapter, CCJ, or mortgage arrears. Antagonistic credit score can be known as as spotty credit, poor credit score, or it may be stated that you’ve got a low credit score rating.

Agricultural Restriction

An agricultural restriction is a rule which can prohibit you from holding a property in case your occupation is in any method associated to agriculture.

Annual Share Price

The Annual Share Price is the speed at which you borrow cash from lender. It contains all of the preliminary charges and ongoing prices that you’ll pay all through the mortgage time period. Because the title suggests, annual proportion price, or APR, is the price of a mortgage quoted in a yearly price. The annual proportion price is an efficient strategy to examine the provides from totally different lenders primarily based on the annual price of every mortgage.


Apportionment, or sharing out, is a facility that permits you to divide the accountability for utilities, property taxes, and so on. with the customer or the vendor of the property when you’re both promoting or shopping for the property.


Arrears occur whenever you default in your mortgage fee or some other kind of debt fee. If in case you have arrears on the file of your present mortgage, you’ll face issues whenever you need to have a look at remortgaging or getting a brand new mortgage.

Association Charge

An association charge is the quantity you must pay your lender to entry explicit mortgage offers. Whereas trying to find a hard and fast price, money again, or discounted price mortgage, you’ll pay this charge on the time that you just submit your utility, it should be added to the mortgage upon completion of the time period, or will probably be deducted from the mortgage on completion.


An task is the doc transferring the lease of the property or rights of possession from a vendor to a purchaser. It could be an endowment coverage to the constructing society in reference to a mortgage.


ASU is Accident, Illness, and Unemployment insurance coverage which covers your mortgage funds in case of an accident, a illness, or involuntary unemployment.

Public sale

An public sale is the general public sale of a property to the one that quotes highest bid. The best bidder has to signal a binding contract that ensures that he do all valuations, searches, and so on. earlier than the sale of the property.

Authority to Examine the Register

An authority to examine the register doc is a doc fro the authorized or registered proprietor of a property permitting the solicitor of the purchaser to get data regarding the property.

Banker Draft

A banker draft is a strategy to make a fee. In look, it’s the identical as a cheque, however in impact it’s a money fee. The cash is given to the financial institution, they usually challenge a cheque that’s licensed to be good for the given quantity.

Base Price Tracker

Base price tracker is a sort of mortgage by which the rate of interest is variable, however it’s set at a premium (above) the Financial institution of England Base Price for a interval or for the complete time period of the mortgage. The most effective half about the sort of mortgage is that it has little or no redemption penalty. Which means that by making overpayments, it is possible for you to to save cash on curiosity by paying off your mortgage sooner than the agreed upon date on the preliminary mortgage contract.

Reserving Charge

A reserving charge or association charge is charged when making use of for a hard and fast or a capped price mortgage. Reserving charges are usually non-refundable if charged upfront, however typically the reserving charge is added to your ultimate mortgage fee.

Bridging Mortgage

A bridging mortgage is beneficial whenever you need to buy a property, however your capacity to take action is contingent upon the sale of your outdated property. It is a very brief time period mortgage that’s paid off as quickly as your outdated property sells. Converse with a mortgage adviser earlier than taking out a bridging mortgage to make sure it’s the best choice for you.

Dealer Charge

A dealer charge is paid to your debt advisor or different middleman that assists you to find the most effective mortgage or mortgage deal in your circumstances. BSAThe BSA, or the Constructing Societies Affiliation, is a bunch that works within the curiosity of member societies.

Constructing Societies Fee

The Constructing Societies Fee is a regulatory group for Constructing Societies. This fee reviews to the Treasury Ministers.

Constructing Society

A Constructing Society is a mutual group that provides you cash to purchase or remortgage residential properties. This cash comes from particular person traders who’re paid curiosity on their funds. A portion of constructing society funds can be raised by business cash markets.


Once you buy a property for the only real goal of renting it out, you possibly can apply for a buy-to-let mortgage. The funds for the sort of mortgage are calculated primarily based in your projected rental earnings as an alternative of your private earnings.

Capital and Curiosity

Your month-to-month mortgage funds include two components: the curiosity and the capital. The curiosity fee is a fee on the curiosity steadiness of your mortgage. The capital fee is a fee on the quantity that you just borrowed.

Capital Elevating

Capital elevating typically means remortgaging for the next quantity than it is advisable repay your present mortgage so as to use the surplus cash for different private monetary makes use of.

Capped Price

A capped rate of interest is an rate of interest that won’t exceed the usual variable rate of interest for a set time period (from 1-5 years) that’s determined by you and your lender. If the usual variable price falls beneath your capped price, your rate of interest will lower accordingly.

Money Again

Money again is the quantity you obtain whenever you take out a mortgage, the quantity could also be mounted or a proportion of your mortgage quantity.


CCJ stands for County Court docket Judgment. It is a resolution reached by a county court docket towards you when you may have defaulted in your debt funds. In the event you clear the debt in query in a set period of time, a passable observe will probably be put in your credit score report to suggest that the debt is taken care of.

Centralized Lender

A centralized lender is a mortgage lender that doesn’t depend on a department community for distribution. Centralized lending is now offered by a number of constructing societies. These societies function individually from their department networks, they usually rely solely on mortgages from middleman sources.


A cost is any curiosity on a mortgage to which a freehold or leasehold property will be held.

Cost Certificates

A cost certificates is a certificates issued by HM Land Registry to you along with your title because the registered title for a given property. This certificates incorporates particulars of restrictions, mortgages, and different pursuits. It has three totally different components: a costs register, a property register, and a proprietorship register. If there isn’t a mortgage on the property, it’s known as a Land Certificates, and it’s issued to the registered proprietor.


Chattels are moveable gadgets in your own home resembling furnishings or your private possessions.Chief RentChief lease is paid by the proprietor of a freehold property. This is identical as the bottom lease that’s paid by a leaseholder.


Council of Mortgage Lenders


Completion is a time period that explains that you’ve got turn into the proprietor of your own home after ending the formalities of the sale and the acquisition of the property.

Conditional Insurance coverage

Once you take out a hard and fast or discounted price mortgage, your lender could attempt to persuade you to take out an insurance coverage coverage that may cowl any missed funds resulting from an sickness, an accident, or unemployment.


A contract is a legally binding sale settlement. There are two similar copies signed by each the customer and the vendor, and every occasion retains a replica for his or her data. As soon as each events have signed the contract, they’re dedicated to the phrases of the settlement.


A conveyance is the deed by which a freehold, unregistered title is transferred. The deed is named an task in case your property is unregistered or leasehold. If the property is registered, the deed is named a switch.


Conveyancing is the authorized course of by which the shopping for and the promoting of a property happen.


A covenant is an assurance given in a deed. Credit score Scoring Credit scoring is the process by which a lender evaluates your paying capability earlier than providing a mortgage or mortgage.

Credit score Search

A credit score search is finished by a lender and a credit score bureau to go looking your data for CCJs and different indicators of spotty credit.

Debt Consolidation

Debt consolidation is the method by which you’re taking out a mortgage or mortgage so as to repay various excessive curiosity money owed. By doing this, you’ll solely must make one fee every month, and you’ll save considerably on curiosity costs.


A deed is a authorized doc that denotes the proprietor of a given property. You’ll be able to switch a title to each freehold and leasehold with a deed.


A deposit is the sum of money you place down towards shopping for a property.


Disbursements are any quantity you pay to solicitors towards land registry charges, searches, faxes and so on.

Discounted Price

Discounted charges are used to draw new debtors to lenders by setting the rate of interest beneath the usual variable price for a assured time period. In the event you repay your complete discounted price mortgage inside the first few years, your lender could cost you early redemption penalties.

Early Redemption Penalty

An early redemption penalty is charged by your lender if you happen to do an element or full fee of your mortgage quantity earlier than the completion of your mortgage time period. These penalties may also be charged if you happen to resolve to remortgage and transfer your mortgage to a brand new lender. Early redemption penalties primarily apply to mounted price, discounted price, and money again mortgages.


Easement is the precise held by one property proprietor to utilize the land of one other for a restricted goal, like a proper of passage.

Endowment Mortgage

An endowment mortgage is an curiosity solely mortgage supported by an endowment coverage. Throughout the time period of the mortgage you’ll pay solely curiosity to the lender, and your premiums are alternately paid into an endowment coverage which can mature over the time period of your mortgage. The endowment coverage is designed to repay your mortgage in addition to act as life insurance coverage. Nevertheless, you can not depend upon this quantity to be ample to pay your whole debt.


There are several types of endowments, however right here an endowment is a life insurance coverage coverage that may repay your curiosity solely mortgage.


Fairness is the quantity of worth in your house. It’s the worth of your property much less the quantity left to be repaid in your mortgage.

Fairness Launch

Fairness launch is a way of releasing cash from the worth of your property both in a lump sum or in month-to-month installments. This cash could also be used for house enhancements, debt consolidation, or different giant bills.

Trade of Contracts

Trade of contracts happens when the customer and the vendor of a property signal and swap the contracts which element the property, the value, the date, and the phrases of the association. When the contracts are signed, they turn into legally binding, and authorized motion will be taken towards anybody who breaks the contract.

Present Liabilities

Present liabilities are all monetary commitments outdoors of your mortgage. Present liabilities could embody financial institution loans, bank card debt, upkeep funds, and so on.

First Time Consumers (FTB or FTP)

A primary time purchaser is one who has by no means owned property earlier than.

Mounted Price

A hard and fast price is whenever you pay a hard and fast quantity of curiosity on a mortgage for a hard and fast time period. Lenders present mounted price loans for brief durations of time (three-six months) all the way in which as much as 25 years. Early redemption penalties apply if you happen to repay the mortgage earlier than the tip of the mounted price time period.

Versatile Scheme

A versatile scheme is a brand new method of calculating mortgage curiosity costs. Lenders calculate curiosity each day as an alternative of on an annual foundation. The brand new rates of interest will solely have an effect on the remaining steadiness of the mortgage. By making common overpayments, you possibly can repay the mortgage sooner thereby saving quite a bit on curiosity costs.


A fixture is an merchandise connected to your property, and due to this fact it’s legally a part of the property.


Freehold means that you’ve got possession of a property for an indefinite time period. That is in distinction to leasehold which signifies that the property is just underneath your management for a restricted time period.

Additional Advance

An extra advance is an add-on mortgage to your present mortgage out of your present lender. The cash from an extra advance could also be used for house enhancements, to buy a freehold property, or for private functions resembling debt consolidation.


A guarantor is an individual who ensures the lender that the borrower is eligible for a mortgage or mortgage. If the borrower fails to make funds, the guarantor will make them.


Gazumping happens when a vendor agrees to promote a property to 1 individual, they usually proceed to say no that provide in favor of a better one.

Floor Hire

Floor lease is the quantity which a leaseholder must pay to the freeholder annually.

Dwelling Purchaser Report

A house purchaser report is made by a lender after a mortgage valuation has been executed and earlier than the complete survey takes place so as to give the borrower a whole understanding of the property they’re considering of shopping for.

Revenue Multipliers

An earnings multiplier is a sort of calculation {that a} lender will use to calculate the quantity a borrower can obtain. The most typical earnings multiplier is thrice a single earnings or two and a half occasions joint earnings. The lender will select the one which yields the upper determine. Lenders are extra versatile in case your LTV ratio is low.

Revenue Safety Insurance coverage

With earnings safety insurance coverage, your month-to-month funds will probably be coated within the case of sickness, accident, or unemployment.


An middleman is a mediator who finds the most effective mortgage for you, they usually additionally organize the mortgage for you in your behalf.

Land Registry Charge

A land registry charge is paid whenever you need to register your possession of a property or whenever you need to change the registered title of a property.


Not like freehold by which a property is owned, leasehold is when a property is owned, however the land that it’s constructed on isn’t owned by the leaseholder. Their management of the property is just for a set variety of years.

Licensed Conveyancer

A licensed conveyancer is sort of a solicitor in that they specialize within the legalities of shopping for and promoting property.

Native Authority Search

An area authority search is made by the solicitor of the those that plan to purchase your property. They verify to verify there aren’t any deliberate developments on the property resembling roads or buildings. They are going to verify for any planning permissions or enforcement notices posted in your property.


LTV, or mortgage to worth, is the share derived from dividing the worth of your property by the quantity of your mortgage. A low LTV is way much less dangerous for lenders than a 100% LTV.

Mortgage Consolidation

Mortgage consolidation occurs when a mortgage is taken out to repay one other mortgage with the next rate of interest or to repay various excessive curiosity money owed. Mortgage consolidation is commonly achieved by remortgaging.


A MIG, or mortgage indemnity assure, is insurance coverage one takes out to cowl their lender within the case that their property is repossessed, and the lender is unable to get their a refund. A MIG is paid for upon completion of a mortgage.


MIRAS, or mortgage curiosity reduction at supply, was a tax reduction given to these with mortgages, however this reduction was abolished by the federal government in April of 2000.


A mortgage is a mortgage that permits somebody to purchase a property. The property itself is the safety for the mortgage.


The mortgagee is the corporate or group that funds your mortgage.


The mortgagor is the individual taking out the mortgage to purchase a property.


MPPI, or mortgage fee safety insurance coverage, is insurance coverage one takes out within the case of an accident, an sickness, or involuntary unemployment that may render them incapable of creating their month-to-month mortgage fee.


MRP, or mortgage reimbursement safety, is insurance coverage taken out by your lender in the course of the time period of your mortgage.

Detrimental Fairness

Detrimental fairness happens when the cash you owe to your mortgage lender is larger than the worth of your property. Individuals discover themselves in unfavorable fairness conditions once they take out 100% LTV mortgages.


Overpayment occurs whenever you pay greater than the common month-to-month fee in your mortgage in order that the mortgage is repaid earlier than the tip of the mortgage time period. With overpayments, it can save you cash on curiosity, however you may additionally be charged an early redemption penalty.Cost HolidayA fee vacation is a interval throughout which you make no mortgagee funds. That is usually out there with versatile mortgages solely.


A PEP, or private fairness plan, permits you to personal shares or unit trusts with out paying any taxes.

Private Pension

A private pension offers in your monetary wants after retirement. You make structured funds into your pension financial savings throughout your working years. Typically, a few of this cash could also be taken out to repay your mortgage liabilities.


Portability is a time period used to explain a mortgage that may be transferred between properties whenever you transfer from one home to a different.


Redemption is whenever you repay your mortgage, whenever you remortgage, or whenever you transfer to a brand new home.

Remittance Charge

A remittance charge is charged by a lender for sending the quantity of a mortgage to your solicitor.


A remortgage is a mortgage taken out from a brand new lender or a mortgage renegotiated along with your present lender to repay your present mortgage. That is executed to lower the rate of interest you’re paying or to boost additional capital.

Reimbursement Mortgages

A reimbursement mortgage is when a part of your month-to-month fee goes towards the curiosity and one other a part of the fee goes towards the principal. That is also referred to as a capital and curiosity mortgage. If funds are made repeatedly, your complete sum of the mortgage will probably be repaid by the tip of the time period.


Retention is the quantity that your lender retains pending till sure situations of your mortgage are met.


Repossession is a authorized course of by which your mortgaged property comes underneath the management of your lender resulting from incomplete reimbursement. Your property could then be offered at public public sale.

Proper to Purchase

Proper to purchase means that you’re legally capable of buy the property at a reduced price in case you have been a tenant for an extended sufficient time period.

Sealing Charge

A sealing charge is an quantity charged by your lender whenever you repay your mortgage.

Self Certification of Revenue

Self certification of earnings signifies that you affirm how a lot you earn, and the lender doesn’t want proof of your earnings from a 3rd occasion. Self Certification is beneficial for self employed individuals or contract employees.

Shared Possession

Shared possession is a scheme devised by housing associations that requires you to pay mortgage funds on the a part of a property that you just personal when you additionally make month-to-month lease funds on the portion of the property owned by the constructing affiliation.


Solicitors are the individuals who give authorized recommendation and perform all of the authorized work for mortgage and remortgage transactions.Stamp Responsibility Stamp responsibility is a tax paid to the federal government on the acquisition of a property.


The SVR, or commonplace variable price, is the bottom price of the lender. It’s topic to alter at any time relying on the lender. The SVR will fluctuate primarily based on the Financial institution of England Base Price.

Structural Survey

A structural survey is the thorough inspection of a property carried out by knowledgeable surveyor.


Tenure means the kind of rights an individual has over a property or the land it stands on. Tenure may very well be freehold or leasehold, for instance.

Time period

The time period of a mortgage is the variety of years over which you propose to pay your mortgage off.

Tie-in Interval

A tie-in interval is an period of time for which you’re sure to a lender. Tie-in durations usually exist with particular mortgage offers like mounted, capped, or discounted charges. In the event you transfer your mortgage to a special lender throughout this era, you’re topic to an early redemption charge.

Title Deeds

A title deed is a authorized doc that validates the possession of your property. A title deed proves your true and authorized proper to your property.

Switch Deed

A switch deed is a authorized deed used for transferring the possession of your property to a purchaser.


The time period unencumbered signifies that you personal your property outright with no mortgages or loans towards it.


A property valuation is a survey carried out on a property by a certified surveyor so as to assess the worth of the property. This valuation is finished on behalf of your lender in order that they can affirm the worth of your property.

Variable Price

A variable price signifies that your rate of interest could change from month to month thereby inflicting your funds to fluctuate month-to-month.


A vendor is the individual from whom you buy a property.

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