Mortgage Jargon
Base Rate - The interest rate set by the Bank of England for lending to other banks used as the benchmark for interest rates generally.
Buy to let - Typically for landlords who want to buy property to rent it out.
Capital - The money you borrow
Mortgage interest - The charge made by the lender on the amount you owe.
Capped Rate - An interest rate on a loan that has a maximum limit on the rate built into the loan.
Completion - When the property has been signed over to the new owners.
Contents Insurance - Contents insurance covers the cost of replacing or repairing your possessions if they are damaged, destroyed or stolen.
Conveyancing - The legal term for transferring ownership of the property.
CCJ (County Court Judgement) - Type of court order that may be registered against you if you fail to repay the money you owe.
Deeds - The document that states that you are the lender have agreed to use the property as a security to protect the mortgage.
Deposits - The cash deposit that you pay upfront when buying a house. Deposit is classed as the security on the loan you’re taking.
Early Repayment Charge - A fee to your mortgage lender, which you might be asked to pay if you repay your mortgage whilst within a fixed rate period.
Endowment Mortgage - A mortgage linked to an endowment insurance policy which is intended to repay the capital sum on maturity.
Fixed rate - The interest rate on your mortgage will remain fixed for the set number of years as per agreement.
Interest only mortgage - You pay the interest due on the amount you borrowed each month, and repay the capital at the end of the mortgage term.
Loan to value - An LTV ratio is calculated by dividing the amount borrowed by the value of the property, expressed as a percentage. e.g. With a value £100,000 and a £10,000 deposit then the LTV will be £90,000, 90%.
Mortgage Advisors - Independent mortgage advisers have a wide knowledge of the mortgages available from a wide range of lenders. Mortgage advisors can search on your behalf and recommend the best deal on the market.
Remortgage -
Repayment Mortgage - A repayment mortgage is when your monthly payments pay towards the capital you have borrowed and a percentage of the interest as well. A repayment mortgage will ensure your mortgage will be pain in full by the time the mortgage term ends.
Repayment Vehicle - An investment you have running alongside your mortgage to repay the loan. Usually these can be endowment policies, stocks, shares, pensions....
