Mortgages glossary

Additional Borrowing
If you own your home and have a mortgage you could take advantage of additional borrowing.

Advance
A mortgage loan.

APR
Stands for Annual Percentage Rate which helps you compare the cost of different mortgage deals. It takes into account the amount of interest you will pay, the length of the term of the mortgage, and other charges such as any product fee.

Bank of England Bank Rate
This rate can go up or down from time to time and is announced by the Bank of England's Monetary Policy Committee.

Building insurance
Building insurance is insurance against the cost of rebuilding a property from scratch following structural damage, for example by flood, fire or storm.

Building survey
A building survey is a technical report following an inspection of the property. It will give you a comprehensive account of the condition of the property, describing any structural or other defects.

Buy to let
A buy to let mortgage is when you buy a property to rent out. A range of buy to let mortgages are available from Halifax.

Capped rate
Your interest rate will go up and down in line with interest rate changes but won’t go above a certain level, the ‘cap’, during the capped rate period. This means that you can enjoy any rate reductions, yet have the comfort of knowing that your rate won’t go above the cap.

Cashback
Certain mortgage products offer cashback, which means you get a cash lump sum (paid to your conveyancer) to spend on anything you want. From time to time we have cashback products available in our range.

Completion date
The day on which a property becomes legally yours.

Conclusion of Missives
The Scottish equivalent of exchanging contracts.

Contents insurance
A contents insurance policy insuring household contents against theft and damage.

Conveyancer
A legal expert handling all documentation for the sale and or purchase of a property. This will be a solicitor or licensed conveyancer.

Conveyancing
Conveyancing is the legal process involved in buying and selling a property.

Credit scoring
A technique used by the lender to assess the suitability of your application.

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Daily interest
With this method of calculating mortgage interest, it is charged on the amount of mortgage outstanding at the end of each day. This means lenders take into account any changes in the amount you owe on a day-to-day basis.

Deposit
The money you pay on exchange of contracts as part of your initial contribution to the purchase of your home.

Disbursements
All the various costs payable to other people or bodies (for example search fees) itemised on your conveyancers invoice for carrying out your homebuying legal work.

Discharge Fee
You have to pay this to some lenders for releasing their hold over a property once you have paid off your loan.

Early Repayment Charge
With many mortgages you have to pay an early repayment charge if certain things happen. For example, if you pay off some or all of your mortgage, or you transfer to a different mortgage rate before the end of the product rate period.

Equity
The difference between the amount you owe on your mortgage and the current value of your property.

Exchange of contracts
The swapping of signed contracts between a buyer's conveyancer and a seller's conveyancer. Once you have exchanged contracts you are both legally bound to the transaction.

Financial Services Authority (FSA)
An independent body which regulates the financial service industry in the UK. Their aim is to help consumers become better informed about financial matters.

Fixed rate
A rate of interest guaranteed not to change over a fixed period of time.

First time buyer
A first time buyer or purchaser is someone who is buying a property for the first time. Some lenders offer special deals available only to first time buyers.

Freehold
A form of legal title to land which means you are the absolute owner of the property and the land it's on.

Guarantor
Someone who guarantees to repay the mortgage if the borrower can't or won't for any reason. Guarantees are usually entered into where the borrower's circumstances would not allow them to borrow enough to buy the home they want. For example, parents may act as guarantors for their children when they buy their first home.

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Halifax Homeowner Variable Rate (HHVR)
This is a rate that is set by us and is often the rate that your mortgage will move to after your initial deal comes to an end.

Higher Lending Charge
A fee sometimes charged by lenders if your mortgage represents a high percentage of the property’s value.

Home Report
The Home Report is the Scottish equivalent of the Home Information Pack, which was introduced on 1 December 2008 and is still in place today. To gain more information, visit the Scottish Government website.

Household insurance
A way of referring to both buildings and contents insurance. Also called 'Home Insurance'. Find out more about Halifax Home Insurance.

Initial Disclosure Document
Initial Disclosure Document contains the information you will receive from a mortgage seller when you first contact them regarding a mortgage or related product. It informs you about the service you will receive, details whether you will receive advice whose products the seller can sell and whether the seller will charge you a fee for their services, and may help you to decide whether to use that seller.

Interest-only mortgage
You only pay interest to your lender throughout the mortgage term and your mortgage balance doesn't reduce.  With this type of mortgage you need to make arrangements to repay the balance at the end of the mortgage term. Find out more about your options for repaying a mortgage.

Key Facts Illustration
A Key Facts Illustration sets out details of the mortgage product that a customer is interested in. All mortgage sellers are required to set out the details in a Key Facts Illustration in the same format, so it's easier for you to compare different mortgage deals.

Land Registry Fee
Land Registry fees are payable by you to register the property in your name. The Land Registry varies these fees from time to time.

Leasehold
This means you own the land your property is built on for a set number of years. You will need to buy an extension to the lease before it expires or the freeholder will no longer allow you to keep your property on the land. Flats are commonly sold as leasehold.

Life Assurance
A form of insurance by which someone's life is insured. Life assurance policies can run parallel with a repayment mortgage, so the mortgage will be repaid if you die before the end of the term.

Loan to value (LTV)
Loan to value is the proportion of the value or price of the property (whichever is the lower), that you borrow on a mortgage. For example, a £90,000 mortgage on a house valued at £100,000 would mean a LTV of 90%.

Local authority search
Part of the conveyancing process when you buy a property, carried out by your conveyancer. It gives details of any matters which, from the local council's point of view, affect the property. It reveals any proposed changes to the local area, such as road improvements, and details any planning permission given for the property.

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Mortgage
A mortgage is something that you give the lender in exchange for the loan that they make to you so that you can buy your property. The mortgage is secured against the property.

Mortgage account fee
The fee is to cover the setting up, routine maintenance and closing down of the mortgage account.

Mortgage Repayment Fee
This fee covers the administration work involved in closing your mortgage account and processing any legal documentation when you redeem your mortgage early. (Please note - We will not charge this fee for customers who are repaying their mortgage because it has run its full term).

Mortgage deed
A legal document establishing a mortgage on a property. This is called a standard security in Scotland.

Mortgage term
The length of time over which you agree to pay back your mortgage, up to a maximum of 40 years.

Mortgage promise
A mortgage promise is a Halifax agreement to a mortgage in principle, sometimes referred to as an Agreement in Principle. It simply tells you if you can have a mortgage and how much you could borrow, subject to valuation of the property and the information you supply being correct.

Mortgage calculator
A mortgage calculator could help you work out how much you could borrow, how much it could cost you each month in repayments and could also help you choose which mortgage deal may be suitable for you.

Mortgage offer
A mortgage offer is issued by a lender once your application has been received and necessary checks, such as a valuation and confirmation of your details, have been carried out. It sets out the terms under which the lender is prepared to offer you a loan.

Negative equity
This is when the amount you owe on your mortgage is greater than the value of your property. It particularly becomes a problem if you want to move house.

Premium
Amount you pay on a regular basis, usually for an insurance policy.

Product fee
Lenders sometimes charge a product fee as part of a mortgage deal. It helps to keep the interest rate on the initial deal lower than it would have been if a fee had not been payable.

Property assessment
A property assessment is usually carried out to determine whether the property provides adequate security for a remortgage.

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Remortgaging
A remortgage is when you arrange a new mortgage on your home, with a different lender and use the new mortgage to pay off the old one.

Repayment mortgage
Your monthly payments gradually pay off your mortgage as well as the interest. Find out more about your options for repaying a mortgage.

Repayment Plan
Before you apply for an interest-only mortgage you will need to make sure that you have a repayment plan in place which will provide enough money to repay everything you owe at the end of the mortgage term. Find out more about your options for repaying a mortgage.

Remortgage Service
The Halifax Remortgage Service is available with many of our remortgage deals. When the Remortgage Service is used we will pay our conveyancers’ legal fees.

Retention
Holding back part of a mortgage loan until repairs to the property are satisfactorily completed.

Stamp Duty Land Tax
Government tax you have to pay based on the purchase price of a property worth £125,001 or more.

Structural engineer's report
A specialist report from a structural engineer on the condition of a property. These are often requested after the initial valuation when the valuer is concerned about the condition of the property.

Survey and valuation
A property survey that includes a valuation and should reveal any major faults in the property.

Tracker rate
Tracker rates are usually linked to the Bank of England Bank Rate. Rates are usually set at a fixed percentage above or below the rate being tracked, but they rise and fall with movements in the rate they track.

Valuation
A valuation is an inspection of the property to ascertain it's acceptability to the lender as security against the mortgage loan. The fee for this is usually charged to the borrower.

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