Key Terms
FSRE — Mortgage & Lending Terms
Mortgage types, rates, affordability, property ownership and lending essentials.
Key Terms
- Capital Repayment Mortgage — Mortgage repaying both interest and loan capital monthly.
- Interest-Only Mortgage — Mortgage where only interest is repaid during the term.
- Loan-to-Value (LTV) — Percentage of property value borrowed.
- Equity — Difference between property value and mortgage balance.
- APRC — Annual Percentage Rate of Charge showing yearly borrowing cost.
- Affordability Assessment — Evaluation of borrower ability to maintain repayments.
- Credit Score — Measure of borrower creditworthiness.
- Arrears — Missed payments owed by borrower.
- Repossession — Lender taking ownership due to default.
- Fixed Rate Mortgage — Mortgage with unchanged interest rate for a set period.
- Tracker Mortgage — Mortgage linked to Bank of England base rate.
- Standard Variable Rate (SVR) — Lender's default variable interest rate.
- Discount Mortgage — Temporary discount from SVR.
- Early Repayment Charge (ERC) — Penalty for repaying mortgage early.
- Freehold — Permanent ownership of property and land.
- Leasehold — Ownership for a fixed lease period.
- Conveyancing — Legal transfer of property ownership.
- Stamp Duty Land Tax (SDLT) — Tax payable on qualifying property purchases.
- Valuation — Assessment of property value.
- Survey — Inspection of property condition.
- Agreement in Principle (AIP) — Initial indication of borrowing capacity.
- Mortgage Offer — Formal approval from lender.
- Remortgage — Replacing an existing mortgage.
- Product Transfer — Switching deals with same lender.
- Underwriting — Detailed assessment of borrower risk.
- Stress Testing — Checking affordability under higher rates.