Jargon Buster

Understanding the jargon can help make things simpler

Annual Percentage Rate of Charge (APRC)
This figure takes into all charges, fees and interest payable over the term of your loan. It does however, assume that nothing changes for that whole term, eg. you never remortgage, switch rates etc

Assured Shorthold Tenancy (usually 6-12 months and required by most lenders on a BTL property)

Final legal transfer of Ownership – when the property becomes yours.

The solicitor dealing with your property purchase or sale.

Early Repayment Charge (ERC)
A penalty that has to be paid if you repay your mortgage balance before the end of your fixed or discounted period.

The difference between the value of a property and any loan secured on it.

Exchange of Contracts (Exchange)
In England & Wales this is the point at which both the buyer and seller are legally bound to the transaction and also when the buyer should start their buildings insurance.

A property (usually a house) where the buyer is buying the land and the property

Ground Rent
An annual charge paid by the leaseholder to the freeholder

When a seller, having already accepted an offer, accepts another higher offer from someone else.

House of Multiple Occupation (HMO)
A property rented on a room to room basis. Treated differently to a normal Buy to Let mortgage due to the nature of the financial risk.

A property (often a flat or maisonette) where the buyer is not buying the land the property sits upon. The buyer will be buying a lease of the property which range from 99 – 999 years.

Loan to Value
The amount of your property that is mortgaged shown as % against the total value.

Negative Equity
When the value of a property falls below the value of a loan or loans secured on it.

NHBC Certificate
A 10 year guarantee provided by the National House Builders Council that the builder will put right any serious defects in the property.

Product Expiry Date (the point at which your fixed or discounted rate will finish and when you are usually able to repay your mortgage without penalty)

Product Fee
A fee the lender charges for a fixed or discounted rate (most lenders will have an alternative fee free product at a higher rate)

The process of moving a mortgage from one lender to another usually to achieve a lower interest rate. (this is the point at which many people would decide to borrow more money if there is a need for home improvements, debt consolidation and other capital raising purposes)

2nd Property SDLT
An additional amount of tax paid by those people buying a 2ndor subsequent property regardless of its use.

Stamp Duty Land Tax (SDLT)
A tax that the government charge on all land and property purchases

Standard Variable Rate (SVR)
The lenders rate you would revert to after a fixed or discounted period has ended.

Transfer of Equity (the addition to or removal of someone from the title of a property. Most common as a result of marital splits and in some circumstances will trigger a stamp duty/2nd property stamp duty calculation/liability)