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   Jargon Buster

Ever wished you could have a Plain English explanation of the all the Jargon your hear ? Well here it is.

Standard Variable Rate — is the Lenders own rate of interest that they charge on their standard mortgage.  This means that your mortgage payments will vary over time in accordance with the changes in the interest rate.

Fixed Rate — is a period of your mortgage where the payments remain static even if interests change.  This means that budgeting during this period is made simpler as payment amounts are stable.

Discounted Rate — is a mortgage that remains a specified percentage lower than the standard variable rate during the discount period.  During this period you can benefit from some savings on your monthly repayments.

Capped Rate — is a standard variable rate which will not exceed a given specified rate.  This means that you can benefit from any reduction in the interest rate but are protected from increases beyond a set level.

Tracker Rate — is a mortgage that moves directly in line with the Bank of England base rate during the offer period.  You would pay less if interest rates fell but more if they increase.

Flexible Mortgage — can incorporate any of the above rates while at the same time allowing you to reduce your mortgage or to take 'payment holidays' without penalty.  They also enable you to re-borrow the money you have paid back so far.

Equity — is the difference between the value of your property and the amount that you borrowed to buy it.  If the house is worth less than you borrowed to buy it you have the dreaded 'negative equity'.

If you have a mortgage for £85,000 but your house is now worth £120,000 you have £35,000 equity.  If you want to know more about how you can free the equity from your home click here.

LTV - Loan to Value — is simply what percentage of the value of the property that is made up of the mortgage.

For example, on a £100,000 property a 90% LTV would mean the lender letting you borrow £90,000.

Stamp Duty — is a one-off fee charged by the government, on any property purchase over £125,000.  It must be paid on completion of your purchase, but does not usually apply to re-mortgages.


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