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Account fee

An account fee is charged for providing and administrating the mortgage. It is payable on completion, however you can defer this fee until the end of your mortgage.

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APR

Annual Percentage Rate. The interest payable on what you've borrowed is added up along with other charges (e.g. product fees) and then expressed as an annual rate of charge. The APR helps you compare the true cost of borrowing, for example, across different mortgages and lenders. The APR takes into account all fees and charges applied to the mortgage as well as the monthly payments over the life of the mortgage.

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Arrears

These are any mortgage payments that were due to be paid by you and are now overdue.

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Bank of England base rate

This is the rate lenders will use when calculating their interest rates for some products.

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Capital repayment

These are the payments, often a lump sum of money, that reduce the capital balance outstanding on your mortgage.

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Chain

The line of buyers and sellers who need to complete their property purchases or sales so that you can complete yours. If one transaction in the chain fails, it can have an effect on all of the others.

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Conveyancing

Transferring the legal ownership of a property from one owner to another.

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Debt

A debt is an amount of money that you owe to a person or company.

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Early repayment charge

On some mortgages this is charged to the customer if they pay off their mortgage during an introductory rate period.

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Equity

This is the difference between the value of your property and the total amount of borrowing secured on it.

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Equity release

A way of generating cash from your home. If your property has risen in value you could take out a new mortgage for a higher value, providing a lump sum of cash.

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Fixed rate

An interest rate that stays the same throughout an agreed period.

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Follow-on Rate

For applications from 23 January 2018, this is the rate that our mortgages will automatically transfer to when the initial product period ends. It is a variable rate which tracks the Bank of England base rate.

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Gazumping

When a seller accepts a higher offer from another buyer after an initial offer was accepted but before contracts were exchanged.

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Gazundering

When a buyer makes an offer for a property, only to lower it at the later stage. The seller then either has to accept the lower offer or find a new buyer and pay new transaction costs.

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HMRC

Her Majesty's Revenue and Customs: the body that house buyers pay their Stamp Duty to.

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KFI

The Key Facts Illustration, or KFI is a quote that shows the costs and fees for the type of mortgage you're choosing.

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Loan to value (LTV)

Loan to Value is the proportion of either the value or the price of the property (whichever is lower) that you borrow on a mortgage. For example, a £90,000 mortgage on a house valued at £100,000 would mean an LTV of 90%. You can calculate your loan to value by using this simple calculation: LTV = amount you wish to borrow ÷ property purchase price x 100.

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Negative equity

When a property is worth less than the mortgage on it.

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Overpayment

This is when you make a larger payment than your normal monthly mortgage payment, usually to reduce your mortgage term.

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Payment holiday

A payment holiday is a period of one or more months when you don't make payments on your mortgage, although interest continues to be charged on the mortgage balance.

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Product fee

Product fees are charged on some of our products to reserve the rate. Some products allow you to add the product fee to your mortgage. If you choose to add the fee to your mortgage, the added fee will attract interest over the term.

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Redemption Statement

This is a statement from your current lender on how much you need to pay them to close your mortgage.

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Remortgage

This means moving your mortgage from one lender to another whilst staying in the same home – usually to get a better rate. The money you borrow for the new mortgage is used to repay the old one.

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Representative example

This is just an illustration of the most popular mortgage deal based on historic data and its total cost.

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RICS

The Royal Institution of Chartered Surveyors, the trade association for chartered surveyors.

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Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is a Government tax paid to HM Revenue and Customs if you buy a property over a certain price in England, Wales and Northern Ireland.

SDLT is charged at the rates based on the amount of the purchase price that falls in each rate band.

When you’re buying your first home you get a discount (relief) which means you pay less or no tax if:

  • you complete on your mortgage on or after 22 November 2017;
  • the purchase price is £500,000 or less; and
  • you, and anyone else you’re buying with, are first time buyers.

Please note, this differs if you’re buying in Scotland where instead there is a Land and Buildings Transaction Tax.

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Standard variable rate (SVR)

Most mortgage lenders have a standard variable rate of interest. It is usually the rate that mortgages revert to after a fixed or tracker product period ends.

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Title deeds

Every property has a document or set of documents called - 'Title Deeds'. They show who owns the property. Ownership is now also shown electronically at the Land Registry.

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Tracker rate

An interest rate that tracks above the Bank of England base which increases/decreases in line with any base rate changes.

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Underpayment

Underpayment is when you make a mortgage payment that's less than you would normally pay each month.

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Important Information

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

All applications are subject to status and our lending criteria. This means that the amount we’ll lend you will depend on your individual circumstances, the type of property and the amount you borrow. For example, we may require a bigger deposit if you’re buying a flat or new build property.