Arrears

When a borrower has missed one or more payments and is behind on what they owe.

Assets

Items of value you own, such as a property, savings, investments or vehicles.

Advance

The amount of money a lender agrees to lend to you.

Annual Percentage Rate (APR)

A yearly rate that shows the cost of borrowing, including interest and some fees.

Annual Percentage Rate of Charge (APRC)

A more detailed version of APR that shows the total cost of a mortgage over its full term.

Agreement/Decision in Principle (AIP/DIP)

An early lender indication of how much they may be willing to lend

Application Processing Charge

A fee charged by a lender or broker to process a finance application.

Adverse Credit

A credit history that includes missed payments, defaults or CCJs.

Balance Transfer

Moving an outstanding loan or credit balance from one lender to another, often to secure a better rate.

Base Rate

The interest rate set by the Bank of England, which influences most lending rates.

Buy to Let (BTL)

A mortgage taken out to purchase property intended for rental income.

Capped Interest

An interest rate that can rise or fall but will not go above a set limit.

Compound Interest

Interest calculated on both the original loan amount and the interest already added.

Credit Rating

A score that shows how reliable you are as a borrower, based on your credit history.

County Court Judgement (CCJ)

A court order issued when a debt has not been repaid, which can negatively affect credit status.

Creditor

An individual or organisation that you owe money to.

CeMAP

A professional qualification allowing advisers to give regulated mortgage advice.

Default

Failure to meet the agreed terms of a loan, usually by missing payments.

Dividends

Payments made to shareholders from a company’s profits.

Disbursements

Costs paid to third parties during a transaction, such as legal or valuation fees.

Debt to Income Ratio (DTI)

A measure of how much your income goes towards repaying debts.

Data Protection Act (DPA)

UK legislation governing how personal data is stored and used.

Equity

The difference between a property’s value and the amount owed on it.

Equity Release

A way for homeowners to access money tied up in their property.

Endowment

A savings-based policy often linked to older mortgages, intended to repay the loan at the end of the term.

Early Repayment Charges (ERCs)

Fees charged if you repay a loan earlier than agreed.

Estimated Value (EV)

An assessment of a property’s likely market value.

Financial Conduct Authority (FCA)

The UK regulator overseeing financial services to protect consumers.

Fixed Interest Rate

An interest rate that stays the same for a set period, giving payment certainty.

Finance Broker

A professional who arranges finance on your behalf by sourcing options from lenders.

Freehold

Owning a property outright, including the land it stands on.

Interest Rate

The percentage charged by a lender for borrowing money.

Individual Savings Accounts (ISAs)

Tax-efficient savings or investment accounts

Insurance Premium Tax (IPT)

A tax applied to insurance policies in the UK.

Independent Legal Advice (ILA)

Legal guidance provided by a solicitor who is independent of the lender.

Introductory Rate

A temporary, often lower, interest rate offered at the start of a loan.

Lenders Administration Charge

A fee charged by a lender for managing or amending a loan.

Late Payment Charge

A fee applied when a payment is made after the due date.

Loan to Value (LTV)

The percentage of a property’s value that is being borrowed.

Loan to Income Ratio (LTI)

The amount borrowed compared to annual income.

Loan Interest Rate (LIR)

The interest applied specifically to the loan amount.

Lifetime ISA (LISA)

A savings product designed to help first-time buyers or retirement planning.

Net Income

Your income after tax and other deductions.

Pre-approval

An initial lender assessment confirming how much you may be able to borrow.

Redemption Charges

Fees payable when a loan is repaid in full.

Redemption Penalties

Costs charged for early repayment during a fixed or discounted period.

Remittance Fee

A charge for transferring funds between parties.

Remortgaging

Switching your mortgage to a new deal, either with your current lender or a new one.

Standard Variable Rate

A lender's default interest rate, which you can change at any time.

Standing Order

An automated regular payment set up through your bank.

Total Amount Repayable

The full amount you will pay back over the life of a loan, including interest and fees.

Top Slicing

Using additional income, such as bonuses or rental income to support borrowing affordability.

Title Deeds

Legal documents proving ownership of a property.

Transfer Deeds

Legal documents used to transfer property ownership.

Unencumbered

A property owned outright with no mortgage or charges against it.

Unsecured Loan

A loan not secured against property or assets.

Valuation

An assessment of a property’s market value by a qualified surveyor.