Jargon Buster | Mortgages | NatWest International

Mortgage jargon buster

Taking the mystery out of mortgages

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Here’s a list of terms and phrases you might come across and an explanation of what they mean. If you're looking for answers to common mortgage questions please visit our common questions section.


A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


A

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Icon expand APRC / APR

The annual percentage rate of charge (APRC) is the total cost of the loan expressed as an annual percentage.  It is provided to help you compare different offers.

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Icon expand Arrears

If you fall behind on your mortgage payments you are "in arrears".

B

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Icon expand Base Rate

A rate of interest set by the Bank of England, which tracker rates and lenders' standard variable rates usually follow.

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Icon expand Broker/Intermediary

An independent adviser who can help you with mortgages and other financial matters.

C

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Icon expand Capital and Interest Payment

Your monthly payment covers the interest and also reduces the total balance outstanding.

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Icon expand CHAPS Fee

A fee to cover the cost of electronically transferring the mortgage funds to the borrower.

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Icon expand Conveyancing

Is the legal process of buying and selling property. This can be done by an Advocate or specialist-licensed conveyancer.

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Icon expand Cost of Credit

The difference between the amount you borrow and the amount you’ll end up paying back taking into account interest and other charges.

D

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Icon expand Deposit

The amount you need to pay yourself towards the cost of the property. This varies depending on the product and lender.

E

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Icon expand Early Repayment Charge (ERC)

Some mortgages, such as a fixed rate mortgage, charge a fee if you pay back the loan early. This can vary, so check your original letter of approval or terms and conditions for the amount.  This is known as an Early Repayment Charge (ERC).

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Icon expand Equity

Is the difference between the current value of your home and the amount outstanding on your mortgage.

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Icon expand Exit Fee

This is an administration fee payable to service providers when you fully repay your mortgage.  

F

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Icon expand Fixed Rate

A mortgage where the interest rate stays the same for a specific period (e.g two or five years) even if the base rate changes in the meantime.

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Icon expand Freehold

You own both the property and the land it stands on.

G

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Icon expand Gazumping

Gazumping occurs when a seller accepts an oral offer (a promise to purchase) on the property from one potential buyer, but then accepts a higher offer from someone else. It can also refer to the seller raising the asking price or asking for more money at the last minute, after previously orally agreeing to a lower one. In either case, the original buyer is left in a bad situation, and either has to offer a higher price or lose the purchase.

J

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Icon expand Joint Applicants/ Joint Mortgages

This is where you hold property ownership rights equally with another person or persons. If one person dies, ownership reverts entirely to the surviving person or persons. This legal agreement supersedes any Will the deceased may have made.

L

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Icon expand Leasehold

You own the property but not the land it is built on for a specific number of years. Flats are usually owned on a leasehold basis. You may find it hard to get a mortgage if there are fewer than 70 years left on the lease of the property you want to buy. Leases are renegotiable, but the shorter remaining terms, the more expensive it will usually be.

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Icon expand LTV (Loan to Value)

LTV means Loan to Value. The size of your mortgage as a percentage of the value of your property. for instance, if you have £50,000 mortgage and your home is worth £100,000, your LTV is 50%.

M

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Icon expand Maturity Date

The date the mortgage must be repaid in full, or by which a new agreement needs to be taken out.

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Icon expand Monthly Repayment

The amount you pay to your lender for your mortgage each month.

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Icon expand Mortgage Offer

This is your guaranteed offer. Once your mortgage is approved you'll get a formal offer setting out the terms and conditions.

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Icon expand Mortgage Term

The amount of time you are repaying your mortgage over (e.g. 25 years).

N

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Icon expand Negative Equity

When the value of your home falls below the amount of your mortgage.

O

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Icon expand Overpayment

This is when you pay extra, over and above your monthly mortgage payment. Overpayments save you interest and may help you to pay your mortgage off sooner.

P

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Icon expand Portability

Where an existing mortgage can be transferred between properties when you move house.

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Icon expand Product Fee

This is a set-up fee for your mortgage. Lenders will charge different product fees so do shop around.

R

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Icon expand Rebuild Costs

The amount it would cost to rebuild your home if it is destroyed (by fire for instance). this is needed for insurance purposes.

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Icon expand Remortgage

When a person transfers their mortgage from another lender.

S

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Icon expand Standard Variable Rate

The default mortgage interest rate your lender will charge you after your initial mortgage deal ends and you choose not to take a new fixed or tracker rate deal.

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Icon expand Service fee

The fee charged by a lender who, with the customer's written consent, requests details from their existing mortgage lender.

T

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Icon expand Tracker Rate Mortgage

The mortgage interest rate is set at a fixed percentage above the Bank's base rate, which usually tracks the Bank of England (BoE) base rate. The interest rate payable will rise and fall in line with changes to the Bank's base rate.

V

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Icon expand Valuation

Mortgage lenders require a valuation to prove that the property is worth the amount you want to borrow.

Talk to us about
mortgages

Want to ask us a mortgage question or arrange an appointment? Our dedicated mortgage team can help.

Chat with our mortgage team or arrange an appointment:

Jersey: 01534 282262 
Guernsey: 01481 703809 
Gibraltar: 00350 200 14477 
Isle of Man: 01624 637676

Lines are open Monday to Friday 9am - 5pm (except bank holidays). If outside these hours please leave a message and one of our team will contact you as soon as possible. Alternatively you can visit your local branch where a member of staff will be happy to arrange an appointment for you.

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