Annual Equivalent Rate illustrates what the savings interest rate would be if interest was paid and compounded once each year.
The Annual Percentage Rate is an interest rate which all lenders must quote on mortgage related financial promotions when an interest rate is mentioned. The APR is intended to help borrowers compare the interest rates on different products.
The person(s) taking out a mortgage.
The amount outstanding on a mortgage (from time to time) being the sum on which interest is calculated.
Capped Rate Mortgage
Whatever happens to interest rates, the borrower pays no more than the capped rate during the specified period. The standard variable interest rate will apply, if lower than the capped rate during the capped rate period.
A cash sum paid on completion of a cashback mortgage. Cashbacks are available on selected products available from time to time.
Certificate of Title
A certificate given to us by a solicitor or licensed conveyancer, confirming that the title to a house is good.
The act of completing a mortgage - usually on the same day as the purchase is completed.
The written legal agreement between the house seller and purchaser.
The legal process of buying and selling a house.
A legally binding obligation between a borrower and lender.
Declaration by Occupier
A declaration signed by someone over the age of 17 who will also reside in a property. It postpones any rights or interest in the property pending full repayment of the mortgage and any further advance.
Discounted Rate Mortgage
The standard variable interest rate is discounted for an initial period. At the end of the discounted period, the interest rate reverts to the standard variable rate.
Early Repayment Charge
An early repayment charge sometimes applies if all or part of a mortgage is paid (over and above the usual monthly payments) during a pre-determined initial period. Any early repayment charge will be confirmed in the Key Facts Illustration (KFI).
Interest only is paid to us on the amount borrowed. In addition to the interest payments, life assurance premiums are paid to a life assurance company for a policy designed by the assurance company to repay the mortgage at the end of the term or death of the borrower.
The difference between the value of the property and the total amounts of any loans secured against it.
Fixed Rate Mortgage
The interest rate is fixed - usually for an initial period of years, after which the interest rate will revert to our standard variable interest rate.
A house owned with no rent payable to anyone else.
Independant non-governmental body, given statutory powers by the Financial Services and Markets Act 2000, that sets standards for all financial institutions to adhere to.
An additional amount borrowed after completion of the mortgage - possibly for an extension or home improvements.
Interest paid on a savings account without any deduction of income tax.
The contractual rate of interest paid on a savings account before the deduction of income tax at the appropriate rate.
A Guarantee is a legally binding commitment given by someone other than a borrower (known as a Guarantor) to pay the mortgage and comply with other obligations owed to us.
Higher Lending Charge
A higher lending charge is normally required by us where a loan is over 75% of the purchase price or valuation of a property. See our mortgage product information leaflet for the fee scale. The higher lending charge is used to purchase insurance for our benefit only, intended to cover part of our loss if we have to enforce the mortgage and sell a house for less than the amount outstanding on a mortgage. The higher lending charge does not release the borrower from any liability to us to make good any loss or shortfall.
An individual, firm or organisation which introduces mortgage applications to lenders (for example, estate agents, mortgage brokers, independent financial advisors, solicitors, accountants and life assurance companies).
Joint Representative Borrower
Where there is more than one borrower, the person entitled to vote and receive notices from the Society on behalf of all borrowers.
Key Facts Illustration (KFI)
An illustration confirming the cost of a regulated mortgage and any fees associated with borrowing the money.
A house owned where ground rent is paid to a landlord.
The date when an investment placed in a fixed term account reaches the end of its term.
The monthly sum payable by a borrower to us.
A loan made by us which is secured on property.
The legal document which secures the loan against property.
Interest paid on a savings account after deduction of income tax at the appropriate rate.
Offer of Advance
The document sent to the borrower confirming financial and other terms and conditions of our mortgage offer.
This type of mortgage is linked to a non-interest earning savings account. The savings in the account are offset against the mortgage which reduces the interest paid on the loan. This arrangement can be very tax efficient, particularly for higher rate taxpayers who would otherwise pay extra tax on their savings.
A mortgage where interest only is paid on the amount borrowed. In addition contributions are paid into a pension scheme intended to be sufficient to pay off the amount borrowed at the end of the repayment period. This method of repaying a mortgage reduces the amount of pension and borrowers must therefore seek professional advice. The borrower will be required to take out life assurance cover so that the mortgage is repaid if the borrower dies during the mortgage term.
In the last resort we will ask the court for possession of a property if the borrower fails to maintain the mortgage payments or breaks other mortgage covenants to us. After we obtain possession we will sell the property and repay the mortgage with the proceeds. Any surplus will be paid to the borrower after all costs have been paid. If the proceeds from the sale are insufficient to repay the mortgage including interest and costs, we will claim the shortfall from the borrower.
The initial amount borrowed when a mortgage commences.
This means the property used as security for the mortgage.
When we ask our valuer to check that repairs or other work has been carried out on a property.
The full repayment of the mortgage.
A mortgage where the borrower pays interest and capital on the amount borrowed. The mortgage will be repaid in full by the end of the repayment period as long as payments are adjusted when interest rates change. No life assurance cover is included in a repayment mortgage. Separate arrangements should be made to provide life assurance cover, critical illness, unemployment cover, etc.
An amount held back from the agreed advance until repairs or other works have been carried out to our satisfaction.
RICS Housebuilding Cost Index
The index to which buildings insurance cover is sometimes linked to ensure that cover keeps pace with current rebuilding costs.
The Society's rules which regulate the relationship between us and our investors and borrowers. All borrowers receive a copy of the rules. The rules are available to savers on request.
These purchases are partly funded by an equity loan paid for by the government and the house builder which is repaid when the property is sold. The remaining portion of the purchase is funded by a conventional mortgage or cash deposit or a combination of both.
This type of purchase was introduced to help people who cannot afford to purchase a home outright. The purchasers buy a share of the property and pay rent on the remaining portion, usually but not exclusively, to a housing association.
This means us.
The person who deals with conveyancing matters.
Standard Variable Rate
Our normal variable interest rate which also applies at the end of any fixed, discounted or tracker mortgage period.
Confirms the amount of interest on savings accounts and the amount of tax paid in a tax year. Tax certificates are available on request.
When a house in mortgage to us is let to a tenant. This must not be done without our prior written consent.
The type of ownership of property i.e. Freehold or Leasehold.
The length of time taken to pay off a mortgage, assuming all contractual payments are paid on time. It is sometimes called the repayment period.
The Deeds or Land Registry certificate for a property.
The right to insist that anyone living in a house leaves before the purchase and mortgage are completed.
The report which we obtain on the value of a house before we approve a mortgage - this is a brief report not a detailed survey report.
The person selling the property.