Mortgage Jargon Buster | Mortgage Definitions & Terminology

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Mortgage jargon buster

Taking the mystery out of mortgages

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Lending criteria, terms and conditions apply. Over 18s only and Republic of Ireland residents only. Mortgaged property must be in Republic of Ireland. Security, buildings insurance and life cover required. 

Our guide to mortgage jargon

Here’s a list of terms and phrases you might come across and an explanation of what they mean. If you're looking for answers to common mortgage questions please visit our common questions section.


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Icon expand APRC

APRC stands for Annual Percentage Rate of Charge. This is the yearly cost of your mortgage. It includes not just the interest on your loan but any other charges you have to pay, such as a valuation fee. It also helps if you compare like for like between mortgage providers.


Icon expand Arrears

If you fall behind on your mortgage payments you are "in arrears".



Icon expand Base Rate

A rate of interest set by the European Central Bank (ECB), which tracker rates and lenders' standard variable rates usually follow.


Icon expand Breakage Cost

Some mortgages, such as a fixed rate mortgage, charge a fee if you pay back the loan early. This can vary, so check your original letter of approval or terms and conditions for the amount.  This is known as and Early Redemption Charge (ERC).


Icon expand Broker/Intermediary

An independent adviser who can help you with mortgages and other financial matters.



Icon expand Capital and Interest Payment

Your monthly payment covers the interest and also reduces the total balance outstanding.


Icon expand CHAPS Fee

A fee to cover the cost of electronically transferring the mortgage funds to the borrower.


Icon expand Conveyancing

Is the legal process of buying and selling property. This can be done by a solicitor or specialist-licensed conveyancer.


Icon expand Cost of Credit

The difference between the amount you borrow and the amount you’ll end up paying back taking into account interest and other charges.



Icon expand Deeds

The difference between the amount you borrow and the amount you’ll end up paying back taking into account interest and other charges.


Icon expand Deposit

The amount you need to pay yourself towards the cost of the property. This varies depending on the product and lender.



Icon expand Early Redemption Charge (ERC)

Some mortgages, such as a fixed rate mortgage, charge a fee if you pay back the loan early. This can vary, so check your original letter of approval or terms and conditions for the amount.  This is known as and Early Redemption Charge (ERC).


Icon expand Equity

Is the difference between the current value of your home and the amount outstanding on your mortgage.


Icon expand Exit Fee

This is an administration fee payable to service providers when you fully repay your mortgage.  



Icon expand Fixed Rate

A mortgage where the interest rate stays the same for a specific period (e.g two or five years) even if the base rate changes in the meantime.


Icon expand Freehold

You own both the property and the land it stands on.



Icon expand Gazumping

Gazumping occurs when a seller accepts an oral offer (a promise to purchase) 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 orally agreeing to a lower one. In either case, the original buyer is left in a bad situation, and either has to offer a higher price or lose the purchase.


Icon expand Guarantor

A third party who agrees to meet the monthly mortgage repayment if you are unable to. This is more common with first-time buyers, with the guarantor likely to be their parent or guardian.




Icon expand Interest Only Mortgage

With an interest only mortgage your monthly mortgage payments only pay the interest element of the loan and don't pay off any of the amount you borrowed. To repay the mortgage some borrowers pay into an investment such as an ISA, pension or an endowment. Others sell their property at the end of the mortgage term.



Icon expand Joint Applicants/ Joint Mortgages

This is where you hold property ownership rights equally with another person or persons. If one person dies, ownership reverts entirely to the surviving person or persons. This legal agreement supersedes any Will the deceased may have made.




Icon expand Land Registry

The official body that holds the details of property ownership.


Icon expand Leasehold

You own the property but not the land it is built on for a specific number of years. Flats are usually owned on a leasehold basis. You may find it hard to get a mortgage if there are fewer than 70 years left on the lease of the property you want to buy. Leases are renegotiable, but the shorter remaining terms, the more expensive it will usually be.


Icon expand LTV (Loan to Value)

LTV means Loan to Value. The size of your mortgage as a percentage of the value of your property. for instance, if you have €50,000 mortgage and your home is worth €100,000, your LTV is 50%.



Icon expand Maturity Date

The date the mortgage must be repaid in full, or by which a new agreement needs to be taken out.


Icon expand Monthly Repayment

The amount you pay to your lender for your mortgage each month.


Icon expand Mortgage Offer

Once your mortgage is approved you'll get a formal offer setting out the terms and conditions.


Icon expand Mortgage Term

The amount of time you are repaying your mortgage over (e.g. 25 years).



Icon expand Negative Equity

When the value of your home falls below the amount of your mortgage.



Icon expand Overpayment

This is when you pay extra, over and above your monthly mortgage payment. You could choose to make a one-off lump sum overpayment or overpay a regular amount with your normal mortgage payment. Overpayments save you interest and will shorten your mortgage term.



Icon expand Portability

Where an existing mortgage can be transferred between properties when you move house.


Icon expand Payment Holiday

This is a period during which you make no payments on your mortgage. While you make no payments interest will continue to be charged. This feature is usually only available on a flexible mortgage.



Icon expand Rebuild Costs

The amount it would cost to rebuild your home if it is destroyed (by fire for instance). this is needed for insurance purposes.


Icon expand Remortgage

When a person transfers their mortgage from another lender.



Icon expand Stamp Duty

This is a tax you pay when you buy a property.


Icon expand Standard Variable Rate (SVR)

A Standard Variable Rate is a type of variable rate mortgage.  This is not available to new mortgage customers


Icon expand Service fee

The fee charged by a lender who, with the customer's written consent, requests details from their existing mortgage lender.



Icon expand Tracker Rate Mortgage

The mortgage interest rate is set at a fixed percentage above the European Central Bank (ECB) base rate. The interest rate payable will rise and fall in line with changes to the European Central Bank base rate.



Icon expand Valuation

Mortgage lenders require a valuation to prove that the property is worth the amount you want to borrow.


Icon expand Variable Rate

Variable Rate is a rate that can increase or decrease when the mortgage lender decides to change it.


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