Glossary/Jargon Buster

Buy to Let - A Buy to Let property is bought with the sole intention of letting it to tenants. Most mortgage lenders offer special ‘Buy to Let’ mortgage deals for this purpose. As this t ype of lending poses a greater risk to the lender, it is usually more expensive than a residential mortgage.

Capital - The amount of money that is borrowed to buy a property.

Conveyancer - A person that specialises in all legal aspects of buying and selling a property.

Deposit - A deposit is a set amount of mone y that goes towards the property you intend to buy.

Fixed Rate Mortgage - The mortgage interest rate stays the same for the initial period of the deal, usually two to five years. This means you can be sure of exactly what you will be paying on your mortgage each month, as your rate won’t go up or down, as it would with a variable rate mortgage.

Interest-Only Mortgage - A mortgage where you only pay the interest on the loan, and you repay the capital you borrowed at the end of your mortgage term.

Interest Rate - The amount of interest you are charged on the capital borrowed.

Mortgage - A Mortgage is a loan taken out to buy property or land. The loan is secured against the property/ land until it is paid off.

Repayment Mortgage - A mortgage where your monthly repayments include capital and interest.

Remortgage - When you change your mortgage lender without moving. You can do this to save money, to change to a different type of mortgage or to release equity from your home.

Stamp Duty Land Tax (SDLT) - A tax you pay when you buy a property. For residential property rates please click here.

Standard Variable Rate (SVR) - The mortgage interest rate your lender will charge after your initial mortgage deal ends, which could be higher or lower than your initial rate.

Surveyor - A person who examines the condition of properties and assesses their value.

Valuation - Lenders require you to carry out a valuation to verify that the property is worth the amount you want to borrow. You should also get a survey done, such as a Homebuyers’ Report or Building Survey Report, to find out about the condition of the property.

Variable Rate Mortgage - The interest rate on your mortgage which can go up or down according to your lender’s standard variable rate.


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