Mortgage jargon buster

If you’re looking for a mortgage then battling through the jargon that comes with it can be time consuming and frustrating.

If you’re looking for a mortgage then battling through the jargon that comes with it can be time consuming and frustrating. Below we have explained some of the most common terms that you may come across in simple terms.

# | 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

Annual percentage rate

The Annual Percentage Rate, or APR, is used to compare one mortgage with another. It is the interest rate you will be charged on a particular loan (or mortgage) over the course of an average year. Lenders must display the APR to allow borrowers to make better-informed choices between one mortgage and another.

Agreement in principle

A confirmation from your mortgage lender stating that they are ready to lend you the money based on the information you have given during the mortgage application. This can also be referred to as a Decision in Principle or Mortgage in Principle.

Appointed representative

An appointed representative is a broker who works under a network. Joining a large network can give brokers access to preferential rates from lenders. Networks also offer other advantages to the broker, such as compliance and administration packages, which means the broker should be working to the networks advice and compliance processes. The Right Advice is a trading style of The Right Retirement Limited, an appointed representative of The Right Mortgage Limited, who are authorised and regulated by the Financial Conduct Authority.

Buy to let

A buy to let mortgage is a loan specifically for a residential property which is let to tenants rather than lived in by the borrower. The property can be a new purchase or refinanced and the rates tend to be higher than standard mortgages.


The money borrowed by yourself from the lender. This is usually repaid monthly over the agreed length of time and terms.

Capped rate

A type of variable rate mortgage with an interest rate ceiling or cap. Meaning your payments can’t rise above this cap. This rate is normally for an introductory period.

Credit score

A credit score or rating is a collection of data about an individuals borrowing / loan repayment history. The higher the score the more likely you are to repay the loan on time. This can mean you get preferential rates with some lenders. The Right Advice is partnered with Checkmyfile who provide you with access to three credit reference agencies including Equifax, Experian and TransUnion.


Your deposit is the amount of money you have ready to put towards buying your new home. The higher your deposit, the less you will need to borrow. Therefore, the higher your deposit, the less you will need to pay to borrow.

Early repayment charge

A charge that is incurred for repaying a mortgage early. It is usually charged as a certain percentage of the loan rather than a set amount.


The value of a home or property owned by the owner. It is measured by the difference between the balance of your mortgage and the market value of the property. E.g if your home is worth £250,000 and you have £100,000 left to pay on your mortgage then your equity in the property is £150,000.

Fixed rate mortgage

A fixed rate mortgage is a mortgage where the interest rate is fixed for a particular duration of the loan.

Flexible mortgage

A flexible mortgage is a type of mortgage that could allow you to make over-payments, underpayments and sometimes payment holidays to suit your financial situation.


Gazumping occurs when a seller accepts a verbal offer 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 verbally agreeing to a lower one.

Hard search

A hard search is when a lender takes a full look at your credit report (and score). This type of credit check leaves a mark on your credit report, so whenever prospective lenders look at your credit report they can see you applied for credit (and whether you were accepted). Most hard searches stay on your report for 12 months (though a debt collection is visible for a period of 2 years).

The Right Advice is partnered with Checkmyfile who provide you with access to your credit report from three credit reference agencies including Equifax, Experian and TransUnion.

Help to buy

Help to buy is a government scheme which can help first time home buyers get a property with just a 5% deposit. The purchase price must be no more than £600,000. Under this scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit. If you live in London, you can borrow up to 40% of the purchase price.

Interest only mortgage

An interest only mortgage allows you to pay just the interest charged each month for the term of the loan. You don’t have to repay the amount you’ve borrowed until the end of the term.

This means your payments will be less than on a repayment mortgage, but at the end of the term you’ll still owe the original amount you borrowed from the lender.


An intermediary is someone or a company that brokers mortgages on behalf of an individual such as yourself and are usually referred to as mortgage brokers. The Right Advice is an intermediary.

Loan to Value (LTV)

Loan to Value (LTV) is the ratio of the value of your loan (mortgage) against the value of the property you want to buy. If you want to buy a £100,000 house and you need to borrow £80,000 to top up a £20,000 deposit, then you’re asking to borrow 80% of the property value, which makes your LTV 80%.

Mortgage term

The mortgage term is the number of years the mortgage is taken out over. E.g. first-time mortgages are typically taken out over 25 to 30 years.

Your home may be repossessed if you do not keep up repayments on your mortgage.




  • Monday: 9:00 - 5:00
  • Tuesday: 9:00 - 5:00
  • Wednesday: 9:00 - 5:00
  • Thursday: 9:00 - 5:00
  • Friday: 9:00 - 5:00

Can't make those times? Please contact us direct to make an out of hours appointment.

Request a call back

We’d love to hear from you – leave us your details & our team will be in touch at a time that suits.

Get in touch

See what our customers say

“I was a first time buyer and had absolutely no clue what I was doing. Sam Clarke was so lovely he talked me through every step and broke it down to me to make the process feel less daunting. He always answered his phone and got back to my emails quickly with the many questions I had. He was on the ball all time! I couldn’t fault him! And to top it off he was a lovely person.”
“Sam has been brilliant, from my search for a property to getting my mortgage offer. He has done everything to help and guide me as he knew that I didn’t have a clue. He offered all the best advice and solutions and nothing was too much trouble, even when he was out of the country. He is always on the end of the phone or email and I couldn’t have sorted my first mortgage by myself without him. I highly recommend Sam for his professional yet personal approach and his dedication to his clients.”
“Sam is a true mortgage professional. He is attentive and even phoned me from his Mediterrenean holiday to make sure things were sorted. He found me a great mortgage solution and took me through the whole process without any glitches and was always there to answer my questions. Sam is highly recommended.”
“We have Sam Clark as our Mortgage Broker.
Very helpful and you will get a quick reply on your queries. The best to describe his service would be, “When you feel like you are hopeless to get a mortgage and you want to give up. Sam is the man for this job because he won’t give up until you get your dream house.”
There is a broker fee for his service but really worth it because he works really hard to help you find a better deal that suits your needs and finances.
Thank you Sam for all your hardwork! God bless you more.”
Mr & Mrs EQ