Advance
The amount you borrow from the lender.

Annual Percentage Rate (APR)
The total charge for the loan including fees and interest expressed as a percentage.

Applied or Nominal Interest Rate
The rate used to calculate the interest due.

Arrears
Mortgage payments which have not been paid as requested and have become overdue

Balance
The amount you owe, after taking payments (credits) and any debits into account.

Bank of England base rate
The Bank of England ‘repurchase’ or ‘repo’ rate which is main factor influencing interest rates charges by lenders.

Buildings insurance
Protects the structure of your home from events such as fire, vandalism, storm or flood. It’s an essential part of your mortgage agreement to ensure that you have a minimum level of buildings insurance. Once you’ve exchanged contracts you’re responsible for the property’s building insurance.

Buy-to-Let Variable Rate (BTLVR)
If you have applied for a Buy-to-let mortgage with us on or after 1 June 2010, the Buy-to-Let Variable Rate is the rate you’ll automatically switch to at the end of your deal. At that time, it could be higher or lower than the rate you have been on and may vary over the remaining term of your mortgage.

Capital
The balance of your mortgage loan excluding costs and interest outstanding.

CAT standard
Stands for Charges, Access, and Terms - which have to be low, easy and fair respectively. These standards were introduced by the Government for mortgages to help borrowers, especially first-time buyers.

Completion
1. The final legal transfer of ownership of the property - when the property becomes yours.
2. The start of the mortgage. This is also known as ’drawdown’.

Contents insurance
Protects the contents of your home, such as furniture, appliances and personal items against damage and theft while they are in the home or if they’re temporarily away from the home.

Contract
The written agreement between the seller and the buyer of a property to transfer ownership.

Contract race
Where the seller has received two or more offers on the property and will sell to the buyer who is ready to exchange contracts first.

Conveyancer
Solicitor or licensed conveyancer who deals with the legal aspects of buying or selling land or property.

Conveyancing
The legal work involved in the sale and purchase of land or property.

Daily interest
Interest is calculated on the balance outstanding each day. So, when you make a payment, interest is calculated on the new balance straightaway. This is usually better than annual interest.

Deposit
Two deposits may be payable by the buyer:
1. A reservation charge. The buyer pays this as a sign of commitment when they initially agree to buy the property.
2. The deposit. A percentage of the price of the property, paid when contracts are exchanged.

Drawdown date
Drawdown is the date when the mortgage starts.

Drawdown deadline
Some mortgage funds are available for a limited period only and usually these mortgages must start by a certain date - the drawdown deadline.

Early Repayment Charge (ERC)
A charge payable on certain types of loan if it is repaid or partly repaid within a certain period eg during a fixed-rate period or while a discount applies.

Equity
The difference between the value of the property and the amount of any loan secured against it.

Exchange of contracts
In England and Wales (not Scotland), the point when both buyer and seller are legally bound to the transaction and at which point the buyer should take out buildings insurance on the property.

First mortgage payment
This is higher than the normal monthly payments, because the lender doesn’t collect it until after the loan starts. So, as well as the normal monthly amount, the first payment will include an interest payment for the rest of the month in which the loan began.

Freehold
Outright ownership of the property and the land on which it stands.

Further advance
An additional loan by the lender to the borrower, which may be for any purpose and secured by the existing mortgage deed.

Gazumping
When the seller, having already accepted an offer but before contracts are exchanged, accepts another, higher offer from someone else.

Ground rent
An annual charge payable by leaseholders to the freeholder.

Higher Lending Charge
A payment to a lender for an insurance policy for the lender’s benefit when they lend above a certain percentage of the property value. The policy covers the risk of selling a repossessed property at a loss. (Previously referred to as Mortgage Indemnity Premium or lender’s risk fee.)

Homebuyer’s survey
A surveyor’s report on a property which is less extensive than a building survey and is paid for by the purchaser.

Initial interest
Any payment due for the period from the day the mortgage began up to the first payment date.

Interest only mortgage
You only repay the interest each month. The original capital balance will remain outstanding at the end of your mortgage term.

Individual Savings Account (ISA)
The Government’s tax-efficient saving scheme. You can make financial provisions for the future by putting money into any of three types of investment - cash savings, stocks and shares and life assurance.

Land Registry Certificate
Provides details of the property including a plan and, if the property is leasehold, a copy of the lease.

Land Registry fee
A fee paid to the Land Registry to register ownership of a property.

Leasehold
The right to possession, but not ownership, of a property for an agreed period of time. Ultimate ownership remains with the freeholder.

Lender
The bank/building society where you have your mortgage.

Loan to Value (LTV)
The size of a mortgage as a percentage of the value of the property or its purchase price.

Local authority search
Questions to the local authority regarding plans for new road building, planning permission for any building work previously carried out, connection to the mains sewer, etc.

Mortgage
Has a specific meaning in law but has come to mean a loan with property as security.

Mortgagee
The mortgagee is the lender who lends money in return for the mortgage granted by the borrower, who is the mortgagor.

Mortgage term
The term over which you agree to repay the loan.

Negative equity
When the value of the property has fallen and is less than the loan secured on it.

New-build properties
A property which was first occupied less than six months ago.

NHBC guarantee
A 10-year guarantee, provided by the National House Building Council, that the builder will put right serious defects on a newly-built property. Zurich Municipal and Premier Guarantee all offer similar guarantees.

No-claims discount
A discount applied to insurance policies if you can prove that you haven’t made a claim on a previous policy for a certain period of time.

Premium
A payment made to an insurance provider for an agreed level of cover. It could be for buildings, contents, payment protection or life cover.

Principal
The amount of the loan on which interest is calculated.

Repayment
When a mortgage is repaid. (Also called redemption.)

Remortgage
Repaying one mortgage by taking out another secured on the same property, possibly to take advantage of a particular mortgage product or better interest rate from a different lender.

Repayment mortgage
You pay interest and part of the capital each month, so your mortgage will be paid off completely at the end of the mortgage term.

Standard Variable Rate (SVR)
In most cases if you have applied for a mortgage with us before 1 June 2010, the Standard Variable Mortgage Rate is the rate you’ll automatically switch to at the end of your deal. At that time, it could be higher or lower than the rate you will have been paying and may vary over the remaining term of your mortgage. This rate is guaranteed to be no more than 2% above the base rate.

Tie in Term
The period of time you would need to remain on certain mortgage terms to avoid an Early Repayment Charge.

Title deeds/title documents
The legal documents which provide proof of ownership of a property.

Transfer deed
A form which provides details of the transfer of ownership to be entered on the Land Registry register.

Underinsurance
The gap between what something is worth and what level of cover it has. This can be on any type of insurance policy, from contents insurance - where people don’t realise the value of their possessions – to life assurance where someone underinsures the value placed on their life; for example if they were to die or become unable to work.

Valuation
An inspection of the property to ascertain its acceptability to the lender as security against the mortgage loan, for which the borrower may have to pay.

Vendor
The person(s) you are buying your new home from