A flexible mortgage’s features will differ between lenders, but generally it is a type of mortgage deal that allows you to overpay, underpay or take a payment holiday.
A guarantor is a third-party (such as your parent) who agrees to meet your monthly payments if you fail to.
Higher Lending Charge (HLC)
A higher lending charge is a fee some lenders may apply if you are borrowing over a certain percentage of a property.
A type of mortgage where you only pay off the interest part of your debt. This means your monthly payments will be smaller, but you will be required to repay all of the capital owed at the end of the mortgage term.
A mortgage taken out by two or more people, such as a partner, friend, family member or business partner.
Expressed as a percentage, loan-to-value is the portion of the property’s value that isn’t covered by your deposit.
See more: Understanding Loan-to-Value & How it Works
A formal contract between the borrower and the lender which outlines the borrower’s legal obligations and the lender’s rights if the borrower defaults a payment.
The amount you pay your mortgage lender each month.
The length of time over which the mortgage is to be repaid.
You are in negative equity if your property is worth less than the mortgage secured on it.
Offset mortgages enable you to link your mortgage to your savings. Your savings are offset against the value of your mortgage, meaning you’ll only pay interest on your mortgage balance minus your savings balance.
A portable mortgage means you are able to transfer your current mortgage and move your borrowing from one property to another without having to pay an arrangement fee.
A remortgage is when you change your mortgage without moving home. You either end your mortgage with your current provider and take out a new mortgage with a different lender or alternatively you negotiate another deal with your existing lender.
See more: Remortgages FAQ – The Ultimate Guide to Remortgaging
If you default your payments too many times and fall into arrears, the lender has the power to repossess your property.
Shared ownership enables buyers to purchase a share of a property (usually between 25% – 75%) and pay a below-market-value rent on the remaining share which is owned by a housing association.
Standard Variable Rate (SVR)
A standard variable rate mortgage is a variable rate mortgage that you’ll most likely be moved onto once your initial mortgage deal (fixed rate or tracker, for example) ends.
The tie-in period is the period in which you are ‘locked in’ to your mortgage deal. If you leave your mortgage during this period, you’ll be required to pay an early repayment charge.
A type of mortgage where the interest rate you pay is based on an external rate (usually the Bank of England base rate).
A type of mortgage where the mortgage rate will fluctuate.