Mortgage jargon A–Z glossary

The mortgage process can involve a lot of unfamiliar terms. Even small differences in wording—such as fixed until versus product period—can affect how your payments work and what you can do next.

This glossary covers many of the most common mortgage and property-transaction terms you’re likely to see in conversations with lenders, brokers, solicitors and estate agents. Each entry is written in plain English, with a practical explanation of what the term usually means.

A

Additional borrowing

Borrowing extra funds on top of your existing mortgage (or alongside a new mortgage). This is often used for home improvements, consolidating debts, or—depending on the mortgage type—funding a property purchase.

Annual Percentage Rate of Charge (APRC)

A yearly percentage figure that reflects the overall cost of borrowing, combining interest and certain fees. APRC is designed to make mortgages easier to compare, although the exact calculation can depend on the product details.

B

Bankruptcy search

A check (typically arranged through your solicitor or conveyancer) to see whether there are any bankruptcy-related issues that could affect the transaction.

Balance sheet

A financial statement that shows a business’s assets, liabilities and equity at a point in time. Lenders may review it when assessing income and affordability for self-employed applicants or company structures.

Base rate

The benchmark interest rate set by the Bank of England. Many variable-rate mortgages move in response to changes in the base rate, which can affect your monthly payments.

Booking fee

An upfront fee charged by some lenders to reserve a specific mortgage deal. Whether it’s refundable or when it’s payable can vary by product.

C

Capital repayment

The part of your mortgage payment that reduces the amount you borrowed (the principal). On a repayment mortgage, each monthly payment usually includes both interest and capital repayment.

Completion

The legal stage that finalises the property purchase. Completion is when the purchase money is transferred and ownership passes to the buyer.

Completion fee

A fee charged by some lenders to cover administration costs connected to releasing mortgage funds.

Consent to let (CTL)

Permission from your lender to rent out a property even though it’s covered by a residential mortgage. Conditions and time limits can apply.

Contract

The written agreement between buyer and seller setting out the terms of the sale. In England, Wales and Northern Ireland, the contract becomes legally binding at exchange of contracts.

Conveyancer

A property legal professional who handles the legal work for the transaction—such as searches, contract review, exchange and completion, and registration steps.

D

Decision in Principle (DIP)

A statement from a lender indicating how much they may be willing to lend based on initial information. A DIP is not the same as a formal mortgage offer.

Deposit

The upfront amount you pay towards the purchase price. A larger deposit typically reduces the loan-to-value (LTV) and may affect pricing and product availability.

Drawn down

When the lender releases the mortgage funds to your solicitor (usually around completion). Interest and repayments generally start from the drawdown date.

E

Early Repayment Charge (ERC)

A fee that may apply if you repay your mortgage early (for example, by redeeming the loan or switching lenders) during a fixed-rate or special deal period. ERCs are product-specific, so checking the mortgage offer documents matters.

Estimated property value

The value used in the mortgage process to help determine whether the lender is comfortable lending against the property. Lenders may require a valuation.

Exchange of contracts

The stage where signed contracts are exchanged between solicitors and the sale becomes legally binding. A deposit is usually paid at this point.

Exit fee

A fee some lenders charge when you pay off a mortgage in full or redeem it. Not all mortgages have an exit fee.

F

Fee saver

A mortgage product where certain fees are reduced or waived. For example, a deal may advertise no arrangement fee or reduced upfront costs. It can be a trade-off if the interest rate is higher.

Financial crime

A broad term covering offences such as fraud, money laundering, and sanctions breaches. Mortgage applications involve checks intended to reduce the risk of financial crime.

First legal charge (England, Wales, NI)

The primary security interest registered against the property in favour of the mortgage lender. If the property is sold to recover debt, this charge is typically paid before later charges.

First-ranking standard security (Scotland)

The Scottish equivalent of a first-ranking security interest. It gives the lender priority rights over the property under Scots law.

Fixed-rate mortgage

A mortgage where the interest rate stays the same for a set period (for example, 2, 5 or 10 years). Your monthly payments are usually more predictable during the fixed period.

Fixed until

The date when your fixed-rate period ends. After this date, the mortgage usually moves to a different rate type unless you arrange a new deal.

Full reinstatement value

The estimated cost to rebuild the property from scratch for insurance purposes. This is different from market value.

H

HM Land Registry

The government body that records property ownership and legal interests in England and Wales. Mortgage charges and ownership changes are registered here.

I

Illustrative

A figure shown as an example to help explain how a mortgage might work. Illustrative numbers are not a guarantee of what will happen.

Interest calculated daily

A method where interest is calculated based on your balance each day. This can mean overpayments reduce interest sooner than if interest were calculated less frequently.

Interest-only mortgage

A mortgage where monthly payments cover interest only, not the repayment of the original loan amount. You’ll need a separate plan to repay the capital at the end of the term.

Interest rate type

How your interest rate is set—commonly fixed, tracker, or standard variable. The rate type affects whether and how your payments can change.

L

Legal charge (England, Wales, NI)

The legal mechanism that secures the lender’s interest in the property. If repayments aren’t maintained, the lender may have rights to recover the debt.

Letter of consent

A document signed by certain occupiers who aren’t named on the mortgage, agreeing to the lender’s security and acknowledging what could happen if the lender needs to repossess.

Loan-to-Value (LTV)

The loan amount expressed as a percentage of the property value. For example, a 90% LTV means the loan is 90% of the property value.

Local searches

Checks carried out by your solicitor with local authorities to identify issues that could affect the property (such as planning constraints or road-related matters).

LPA (Law of Property Act 1925)

A piece of legislation relevant to property law in England and Wales. In mortgage contexts, you may see it referenced in relation to certain enforcement or receivership processes.

Lump sum payment

A one-off extra payment you make to reduce the mortgage balance. Whether it’s allowed, and whether there are limits or charges, depends on the mortgage terms.

M

Maximum LTV

The highest LTV a lender will consider for a specific mortgage product or borrower profile.

Monthly payment

The amount you pay each month. For repayment mortgages, it typically includes both interest and capital repayment; for interest-only mortgages, it usually covers interest only.

Mortgage debt

The outstanding amount you still owe on your mortgage at a given time.

Mortgage deed

The legal document that creates the lender’s security interest in the property (the exact naming can vary by jurisdiction). It’s part of what makes the mortgage a secured loan.

Mortgage illustration

A document showing projected costs and payments for a proposed mortgage based on assumptions. It helps you understand what the mortgage could cost under the stated terms.

Mortgage term

The length of time you agree to repay the mortgage. Terms vary and can affect monthly payments and total interest.

Mortgage offer

A formal document from the lender confirming the mortgage details they will provide, subject to conditions and a validity period.

N

Negative equity

When the property’s value is lower than the amount owed on the mortgage. This can make selling more difficult because the sale proceeds may not cover the outstanding balance.

No onward chain

A situation where the seller is not dependent on buying another property using the sale proceeds. This can reduce delays and complexity.

New-build property

A property that is newly constructed or very recently built, sometimes with warranties and potentially different lender requirements.

O

Outstanding balance

The remaining amount owed on the mortgage at a particular point in time.

Overpayment

Extra payments made beyond the normal monthly amount. Overpayments can reduce the balance and potentially shorten the mortgage term or reduce total interest, subject to product rules.

P

Payment day

The day of the month your mortgage payment is collected. If it falls on a weekend or bank holiday, collection may move to the next working day.

Personal data

Information that identifies an individual, such as name, address and financial details. Mortgage applications involve handling personal data securely and in line with data protection requirements.

PHTSA (Private Housing (Tenancies) (Scotland) Act 2016)

Legislation relevant to private tenancies in Scotland. It can come up in buy-to-let contexts when considering rental rights and obligations.

Porting

Moving (porting) an existing mortgage to a new property, where the lender allows it. Porting can sometimes help avoid certain early repayment charges, depending on the product.

Product period

The initial period of a mortgage deal (for example, the length of a fixed rate or introductory discount). After the product period ends, the mortgage usually moves to a different rate type.

Property chain

A sequence of linked property transactions where each sale depends on another. If one link fails, it can affect the rest of the chain.

R

Remortgage

Switching your mortgage deal—either with the same lender or a new one—without moving home. Remortgaging can be used to change rate type, repayment structure, or borrow more (subject to lender requirements).

Residential mortgage

A mortgage intended for a property you live in as your main residence. If you plan to rent the property out, you may need consent to let or a different mortgage type.

Right of withdrawal

A legal right to cancel certain agreements within a set period. Mortgage withdrawal rights can be limited once the mortgage is in place, so the timing and terms in the documentation are important.

S

Securitisation

A process where lenders package groups of loans and sell them to investors. Borrowers typically continue dealing with their lender or servicing arrangement, but the underlying ownership of the loan may change.

Security document

The legal paperwork that creates the lender’s security interest in the property (for example, a mortgage deed or standard security). It underpins the lender’s rights if repayments aren’t maintained.

Security (for a loan)

An asset used as collateral for a loan. With mortgages, the property is the security.

Soft credit check

A type of credit search that does not usually affect your credit score. It’s often used for initial checks or quotations.

Solicitor

A qualified legal professional who can act in property transactions. In many cases, a solicitor performs the same role as a conveyancer.

Stamp Duty Land Tax (SDLT)

A tax on property purchases in England and Northern Ireland. Rates and rules depend on the purchase price and circumstances. In Wales and Scotland, different taxes apply.

Standard conditions

The baseline contractual terms that apply to certain mortgages unless varied. They often cover responsibilities such as insurance and what happens in arrears.

Standard valuation

A valuation carried out on behalf of the lender to confirm the property’s suitability and value for lending purposes.

Standard Variable Rate (SVR)

The lender’s default variable rate after any fixed or introductory period ends. The lender can change the SVR.

Switching

Changing your mortgage product with the same lender (often called a product transfer). This is different from remortgaging to a new lender.

T

Tariff of charges

A document listing the fees a lender may charge in connection with your mortgage, such as charges for certain requests or administrative processes.

Tax authorities

Government bodies responsible for collecting taxes. In mortgage contexts, lenders may reference tax compliance checks.

Tax information

Information about your tax status that lenders may request to meet regulatory and compliance requirements.

Term

The duration of the mortgage loan agreement.

Title search

Checks carried out to confirm the legal ownership and identify any rights, restrictions or issues affecting the property.

Tracker mortgage

A variable-rate mortgage where the interest rate follows a reference rate (often the Bank of England base rate) plus or minus a fixed margin.

Transfer deed

The legal document used to transfer ownership of the property from seller to buyer (for example, the TR1 form in England and Wales).

U

Underwriting

The lender’s assessment process to decide whether to approve a mortgage application. Underwriting typically involves reviewing income, credit information, property details and supporting documents.

Why mortgage jargon matters

Understanding common mortgage terms can make the process feel less daunting and help you interpret what’s happening at each stage—especially when you’re comparing deals, reading mortgage illustrations, or reviewing documents from your lender and solicitor.

If a term isn’t clear, it’s usually worth asking for it to be explained in plain English before you commit to a mortgage product or sign paperwork.