Understanding Mortgage Terms – P to Z

Understanding Mortgage Terms - P to Z

In previous blogs we have covered letters A to C, D to F and G to O. In this final part we will cover P-Z, and hopefully over the course of these blogs you are now well versed in mortgage terminology.

Portability

If you have a portable mortgage, you can transfer your borrowing from one property to another without having to pay any additional fees.

Remortgage

This is when you change your mortgage without moving. There are different reasons to do this, including saving money, changing your mortgage type or to release equity from your home.

Repayment Mortgage

This is when you pay off the mortgage interest and part of the capital of your loan each month. A repayment mortgage is the only type that guarantees you paying off your mortgage by the end of the term.

Shared Ownership Scheme

A shared ownership scheme is designed to allow those who would usually be unable to get a foot on the property ladder to do so. The home buyer takes out a mortgage on a share of a property from a local housing association and pays rent to it for the rest.

Stamp Duty

This is a government tax that is payable when you buy a property for more than £125,000 (or £250,000 if you are a first time buyer).

Standard Variable Rate

This is the default interest rate your lender will charge after your initial mortgage deal. After your ‘tie-in’ period is over, your interest rate will move to your lender’s SVR, which can be higher or lower than your current rate.

Sub-Prime/Non-Conforming Mortgage

This is a type of mortgage that is aimed at those who have had credit problems in the past. Although they were accessible before the credit crunch, they are now much harder to find and apply for.

Tracker Mortgage

This is when the interest rate on your mortgage tracks the Bank of England base rate, and is set at a margin above or below it.

Variable-Rate Mortgage

The interest rate on your mortgage can go up or down according to your lender’s standard-variable rate.