Mortgage Jargon Buster

If you’re a little confused by some of the terms of used about mortgage then help is at hand. Our mortgage jargon buster can give you the low down with simple explanations for some of the terms used.

Annual Percentage Rate of Charge (APRC)

The Annual Percentage Rate of Charge or APRC is an interest rate which all lenders must quote on mortgage related financial promotions when an interest rate is mentioned. The APRC is intended to help borrowers compare the overall cost between different products.


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 our standard variable rate.

Early Repayment Charge (ERC)

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 Illustration.

Endowment Mortgage

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.

European Standardised Information Sheet (ESIS)

A pre-contractual disclosure document provided to a prospective borrower as part of the enquiry process prior to the submission of a mortgage application.

Execution Only

A type of sale where the customer has chosen a specific product and has chosen not to receive financial advice at that time. Execution Only sales are not protected by the Financial Conduct Authority.

Family Assist Mortgages

Our Family Assist mortgages allow family members to support a borrower access a mortgage of 100% of the value of the property by providing collateral security using either cash savings or equity in the family member’s home.

Financial Conduct Authority (FCA)

The Financial Conduct Authority regulates the financial services industry to ensure firms adhere to the rules and consumers do not fall victim to scams or get tied into unfair contracts.

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.

Further Advance

An additional amount borrowed after completion of the mortgage – possibly for an extension or home improvements.


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 80% of the purchase price or valuation of a property. 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.


A house owned where ground rent is paid to a landlord.

Lending Criteria

The terms set out in our lending policy that applies to mortgages taken out with us. All borrowing with us is subject to our lending criteria.

Monthly Payment

The monthly sum payable by a borrower to us.


A loan made by us which is secured on property.

Mortgage Deed

The legal document which secures the loan against property.

Mortgage Offer Letter

The document sent to the borrower confirming financial and other terms and conditions of our mortgage offer.

Offset Mortgage

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.

Pension Mortgage

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.

Possession Proceedings

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.

Principal Sum

The initial amount borrowed when a mortgage commences.


This means the property used as security for the mortgage.


The full repayment of the mortgage.


When we ask our valuer to check that repairs or other work has been carried out on a property.

Repayment 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.

Repayment Strategy

The means by which the customer intends to repay the outstanding capital and, where applicable, pay the interest accrued, where all or part of the mortgage contract is an interest only mortgage.

Subject to customer circumstances, acceptable types of repayment strategies may include:

  • savings or investments (including endowment policies and existing Personal Equity Plans)
  • pension lump sums
  • a portfolio of stocks and shares or a stocks and shares ISA/NISA
  • the sale of a mortgage/debt free UK located Buy to Let or holiday home that is owned by the mortgage applicant(s) on a Joint Tenant basis
  • property downsizing
  • in the instance of Buy to Let mortgages, the sale of the property

Representative Example

The Representative Example is shown to inform a prospective borrower of the typical costs involved in the mortgage being promoted. It includes all costs associated with accessing the product.


An amount held back from the agreed advance until repairs or other works have been carried out to our satisfaction.

Retirement Interest Only (RIO) Mortgage

To follow

Society Rules

The Society’s rules regulate the relationship between us, The Mansfield Building Society, and our members as investors and/or borrowers. All borrowers receive a copy of the rules. The rules are available to savers on request.

Shared Equity

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.

Shared Ownership

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.

The Society

This means us, The Mansfield Building Society.

Solicitor/Licensed Conveyancer

The person who deals with conveyancing matters.

Standard Variable Rate (SVR)

A variable interest rate set by us which also applies at the end of any fixed, discounted or tracker mortgage period. As a variable rate it may go up or down.


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.


A qualified individual who assesses and processes mortgage applications to our lending criteria.

Vacant Possession

The right to insist that anyone living in a house leaves before the purchase and mortgage are completed.

Valuation Report

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.

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