Understanding Mortgage Terms – G to O

In previous blogs we have covered letters A to C and D to F. In this blog we will cover G to O. Many of these terms are ones you will come across regularly when researching mortgages, and although at first you may not recognise any of them, this helpful series of blogs will have you understanding them in no time.


Common with first time buyers, guarantors are a third party that agrees to pay the monthly mortgage repayment if you are unable to. Often a guarantor is the parent or guardian of the purchaser.

Higher Lending Charge

This is a charge that is sometimes added to your loan if you are borrowing more than 75% of your chosen properties value. This protects the lender against any defaults on your mortgage repayments.

Interest-Only Mortgage

With an interest-only mortgage you only pay the interest each month. This gets paid into an investment, with the aim that you can pay off the loan at the end of the term. There is no guarantee, however, that you will end up with enough.

Land Registry

The Land Registry is the official body who are responsible for maintaining details of property and land ownership.


This is when you own a property but not the land it is built on. Flats are often leasehold. It is more difficult to get a mortgage on properties that have less than 70 years on their lease.


This is the size of your mortgage as a percentage of the properties value.

Mortgage Agreement In Principle

This is a document from your mortgage lender that details the amount you are eligible to borrow. This can be used as evidence to sellers you can afford to purchase their house.

Mortgage Payment Protection Insurance

This is a type of insurance that covers your mortgage (usually for 12 months) if you are unable to work (due to sickness, unemployment etc.). It can also be known as ASU insurance.

Mortgage Deed

This is a formal contract between your lender and yourself, which details the legal obligations and parameters of the borrower and the rights that the lender has if the borrower defaults on repayments.

Negative Equity

This is when the value of your home falls below the amount remaining on your mortgage.

Offset Mortgage

Offset Mortgages link your mortgage with savings (and your current account on occasion). Your balances are offset against your mortgage debt so you need only pay interest on the difference. Offset mortgages are more expensive than conventional mortgages.

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