Mortgage Glossary
Here is a glossary of jargon you may encounter when dealing with mortgages.
- Advance
- The money that you borrow.
- Arrangement fees
- Charged to arrange a loan on certain products. Usually applied to loans where a special interest rate applies, e.g. fixed or capped rates.
- Buy-to-let
- A mortgage to buy a property which is to be used solely for the purposes of renting out to another party.
- Conveyancing
- The legal process involved when buying or selling property.
- Deposit
- Savings used as a down-payment on a house.
- Equity
- The value of your home minus any outstanding mortgage loans.
- Freehold
- A term which means that you own the property and the land it is situated on.
- Further advance
- A secured loan to release equity in your house for any purpose.
- Leasehold
- A type of ownership in which a person owns a property, but not the land on which it is built. Typically the land will be leased to the owner of the property.
- Legal fees
- The fees charged by a solicitor or other qualified individual to carry out the legal work associated with buying a house.
- Negative equity
- Where the outstanding mortgage amount is greater that the value of the property.
- Payment holiday
- An option usually given on flexible mortgages that allows you to stop making mortgage payments for a specific period of time. Usually any interest payments that you miss by taking a payment holiday are added to your mortgage debt and you are then charged interest on that amount.
- Retention
- A lender may hold back some of the mortgage money until certain works or repairs have been done to the property. The amount held back is known as a ‘retention’.
- Right-to-buy
- Mortgages for local authority (council) tenants who qualify to buy their home under the government’s right-to-buy scheme.
