APR
Annual Percentage Rate. A term defined in consumer credit legislation with the intention of providing a standard basis for comparing different forms of credit

Arrangement Fee
This is a fee you pay to your Lender in return for providing you with a mortgage. This is usually paid on completion of the application. These fees apply to all mortgages types.

Buy to Let Mortgage
Buy-to-let mortgages are provided for property purchases or remortgages for investment in the private rental sector. Assessment of borrower affordability can be based on projected rental income and/or earnings, dependent on the lender's individual policy.

Capital & Interest Repayment Mortgage
A Capital & Interest Repayment mortgage is one where you pay both a capital and interest payment each month. In this way and so long as all payments are made during the term of the mortgage, the lender will guarantee that the debt will be repaid by the end of the chosen term.

Capped Rate
A capped rate mortgage has a maximum interest rate for a given term. The interest rate you pay cannot go higher than the agreed capped rate, thus you know the maximum amount your monthly repayments could rise to.

Cash back
A payment you receive when you take out a mortgage. It may be a fixed amount, or a percentage of the amount of the mortgage.

Conveyance
The deed by which freehold, unregistered title changes hands. If the property is leasehold and unregistered it is called an assignment. If the title is registered the deed is called a transfer.

Current Account & Offset Mortgages
A current account mortgage allows you to operate your mortgage borrowing through a current account. This method enables you to save interest as your normal cash-flow will alter the outstanding debt. You will be required to pay your salary into the account. An offset mortgage allows you to keep your balances e.g. mortgage, savings, current account etc in separate accounts but all balances are offset against each other thus allowing the possibility of reducing the interest paid and could result in the mortgage being repaid early.

Discount Rate
An interest rate which is set at a set margin below standard variable rate usually for a period of 1 - 5 years. Used as an incentive to attract potential new borrowers.

Early Repayment Charges
This a fee charged by a lender if you pay off part or your entire mortgage before the agreed date, or you move your mortgage to another lender.

Exchange of Contracts
This is the point at which you and the person selling the property sign and swap identical contracts that show the price and which fixtures and fittings are being sold, as well as the date on which everything is to be completed. When contracts are signed, everything becomes legally binding and if you or the seller pulls out before completion you or they will have to pay compensation.

Fixed Rate
The interest charged on a mortgage is set for an agreed period.

High Lending Charge
This is a fee that is used to buy insurance to protect the mortgage lender if you borrow more than a given amount. Many mortgage lenders will lend you up to, say, 90% of the value of a property without this fee. But, if you want to borrow more, the lender usually requires you to pay for insurance to ensure that it will recover all its money, even if the property had to be sold for less than the amount of the mortgage.

Income Multiple
This is a calculation used by mortgage lenders to determine how much they will lend you. This is typically three times your income, or two and a half times joint income. However, many lenders now base this on your ability to make repayments, taking into account your income and outgoings.

Interest Only
An Interest only mortgage is one where no capital repayments are made so at the end of the mortgage term the original capital remains outstanding.

You understand that this method does not guarantee to pay off the mortgage debt. Please remember it is your responsibility to ensure that a suitable investment product is in place to repay the mortgage loan and that it remains in force for the full term of your mortgage. Failure to do so may result in insufficient funds being available to re-pay your loan at the end of the term and therefore putting your home at risk.

Loan to Value (LTV)
Loan to Value. This refers to the size of the mortgage as a percentage of the value of the property i.e. a £45,000 mortgage on a house valued at £100,000 would mean that the LTV would be 45%.

Mortgage
A mortgage is the security offered in exchange for a loan. For most people this will be their residential home. This security means that if you do not keep up the payments, the lender can sell your home to get its money back.

Portability
A term used to describe a mortgage that can be transferred between properties when you move house.

Remortgage
Switching a mortgage from one lender to another.

Repayment Mortgage
With a repayment mortgage, the money you pay each month covers both the interest and capital of the loan. This means that at the end of the term you don't need any extra money to pay off the loan.

Split Interest & Repayment
This is where part of your mortgage remains on interest only and part by way of a repayment mortgage. You understand that this method does not guarantee to pay off the mortgage debt. It is your responsibility to ensure that a suitable investment product is in place to repay the mortgage loan and that it remains in force for the full term of your mortgage. Failure to do so may result in insufficient funds being available to re-pay your loan at the end of the term and therefore putting your home at risk. 

Stamp Duty
This is a tax payable on the purchase of a property by the purchaser.

Tracker Mortgage
These mortgages track the changes in base rate and so the interest rate you pay changes in line with this.

Valuation Fee
A fee payable to the lender to check what a property is worth and if it is suitable to lend a mortgage on.

Variable Rate
The interest rates the lender charges. It can up and down and your repayments change accordingly.