Mortgage Jargon Guide

Agreement in Principle/ Mortgage in principle

An AIP (Agreement in Principle) also known as mortgage in principle, will give you an estimate of how much you may be able to borrow for a purchase or remortgage. It is the documents that you can use with an estate agents to show that you may be in a financial position to purchase it.

Deeds

Deeds also known as Title Deeds are the legal documents that record the ownership of a property and any land

Equity

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

Fixed rate mortgage

A fixed rate mortgage is where the interest rate stays the same for a certain time such as 5 years.

Land Registry

The official body that holds the details of the property ownership

LTV (Loan to value)

This is the size of your mortgage as a percentage of the value of your property. For example, if your mortgage is for £50,000 and your home is worth £100,000, your loan to value is 50%

Product Fee

This is a fee mortgage lenders can charge as a set-up fee. Not all lenders charge this and it will be different depending on the lender.

Mortgage Term

This is the length of time you will be repaying your mortgage for, for example 25 years

Gifted Deposit

This is a deposit gifted by someone, perhaps a family member and provides you with some or all of your mortgage deposit. Lenders will only accept this from certain people eg, parents so it is important to check if it can be accepted first.