Mortgage Terminology

We understand that people can have difficulties when getting their head around the terminology that is associated with getting a mortgage. We have compiled a comprehensive list of common jargon often encountered during the application process in plain, simple English for your reference.

Acceptance Fee

Charged in some cases by the financial institution when an offer of a mortgage is accepted.


The amount of the mortgage.

Annuity Mortgage

This is the term given to a standard principle and interest monthly repayment home loan.


The abbreviation for annual percentage rate. It represents an interest rate calculation to reflect the total cost of credit over the whole term of the mortgage.

Base Rate

This usually refers to the mortgage lenders standard variable interest rate.


The amount borrowed from the lender


Title deeds of the property the mortgage is taken out on given as security against the repayment of the mortgage


The legal work involved in transferring ownership of the property between the buyer and the seller


Documents proving the legal entitlement of the owner to the property


A payment made by the buyer when contracts on the property are exchanged.


The costs borne by the solicitor in carrying out all work related to the sale and purchase of a property.

Endowment mortgage

A mortgage whereby interest is paid monthly to a financial institution while the capital element is repaid via an insurance company through an endowment policy


The difference between the market value of the property and any loans secured against it

First charge

A lender with first legal charge has first entitlement to any funds when a property is sold as repayment of the loan they provided

Fixed Interest Mortgage

Loan repayments are based on a set rate of interest for an agreed period.


Ownership of a property and the land it is situated on.


Where the seller cancels an arrangement to sell a property to a buyer in favour of a higher offer.

Indemnity bond

An insurance policy bond taken out by a mortgage provider as additional security to cover large loan amounts.

Land registry fee

A fee paid to register the ownership of a property. This usually included in the legal costs charged by a solicitor.


A form of property ownership whereby the property is leased by the owner for an agreed number of years.


An individual to whom a lease is given


An individual who offers and grants a property for lease.

Loan to value (LTV)

Borrowings expressed as a percentage of the asking price of the property


A loan raised against the title deeds of a property

Mortgage Indemnity Bond

Should a property be repossessed and sold on this protects the lender against the possibility that the equity raised from the sales does not cover the outstanding mortgage.

Mortgage Protection

Life insurance that covers all borrowing in the event of the death of the mortgage holder.

Negative Equity

This is the result of a fall in property prices subsequent to the purchase of a property with a mortgage. The property’s market value in this instance is less than the value of the mortgage.

Pension Mortgage

An interest-only loan where the principal will be repaid though the cash received at the end of the pension fund


The total amount of borrowings that interest is paid on.


Payment of a mortgage in full at the end of the mortgage term, or earlier if the mortgage holder is moving to another property


A legal process carried out to ensure that the seller of the property has the right to do so and that they are the sole owners of the property, and also to establish if any planning applications or other legal issues affect it

Structural Survey

A comprehensive physical inspection of a property to ensure it is structurally sound and highlight any visible and potential weaknesses.

Stamp Duty

A government tax on the purchase of property, primarily second hand property unless a new property exceeds 125 sq. meters. Rates vary depending on the price of the house and the circumstances of the buyer.


The agreed period of time over which a mortgage is repaid. In some instances this can be adjusted during the life of the mortgage.


The right to ownership of a property.

Top-up loan

Additional borrowings secured against the property above the existing loans against it.


A deed that transfers legal ownership of the property


An inspection of the property for the mortgage provider to assess whether its market value adequately secures the loan they are advancing


The seller of the property