Property & Mortgage Jargon

When you are involved in the buying or selling of a property things can happen very quickly and with all of the lengthy documents and confusing lingo, you would be forgiven for feeling a little bewildered.

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Understanding all of these new words that are suddenly being forced into your every day conversations is a great start if you want to minimise stress and maximise control during the buying/selling process.

Here at SoSmart Money we have compiled a glossary of the most commonly used property jargon to help you get to grips with the business of buying/selling a home.

Annual percentage rate (APR)

APR is an expression of the effective interest rate that the borrower will pay on a loan, taking into account one-time fees and standardizing the way the rate is

Basically then, APR is the total cost of credit to the consumer, expressed as an annual percentage of the amount of credit that they are granted.

APR is intended to make it easier to compare lenders and loan options and generally, the lower the APR the better the deal.

However, it should only be used as a starting point for comparison as there is no standardized method to calculate APR across different companies so you must be wary of costs not included.


Somebody who is in arrears has fallen behind with their mortgage payments and they are therefore at risk of the lender taking action to repossess the property.

Building survey (Full Structural Survey)

This type of property inspection is carried out by a chartered surveyor and is very thorough. It involves the compiling of a written report that will detail any defects in the property being surveyed.

Properties that are old, poorly maintained or have been heavily altered are perfect candidates for building surveys as a means of diagnosing any potentially costly structural problems before deciding whether or not to purchase.

Chartered surveyor

Chartered surveyors are employed to carry out building surveys. A chartered surveyor will be suitably qualified and a member of the Royal Institute of Chartered Surveyors(RICS).


A conveyancer is either a solicitor or a legally qualified individual who deals with the conveyancing.

Conveyancing entails the legal work involved in property transactions, including advising buyers and sellers of their rights, researching legal ownership, contracts and leases, and liaising with lenders and agents.

Endowment mortgage

This is one of three main types of interest only mortgage. You make regular payments to your lender to cover the interest on your mortgage, then on top of that, you pay an amount into a life assurance endowment policy which allows for you to save up to pay off the loan with a lump sum payout at the end of the period

Endowment mortgages have been a source of controversy in recent years, because many people have found that they have not accumulated enough money to pay off their mortgages. This is called an endowment shortfall.

Fixed rate mortgage

A fixed rate mortgage involves an agreement where you pay a fixed rate of interest on your mortgage for a set period so your monthly payments do not fluctuate and you know exactly how much you will be paying.

Once the period ends you will most likely end up paying a variable rate of interest determined by your lender.


With a freehold purchase you will own the property outright and have complete responsibility for all maintenance and repair work.


This is an unusual word with a rather simple meaning. All it is referring to is a seller who has already agreed a price with a buyer, then accepting a higher offer from a third party before the contracts are exchanged.


Gazundering is an equally unusual word which has an equally simple meaning. It refers to a case where a buyer offers a seller a lower offer than the one they had previously agreed on just before the contracts are due to be exchanged.

Interest only mortgage

This is one of the two main classifications of mortgage, repayment being the other.

With this type of mortgage you make regular payments to your lender to cover the interest on your mortgage, and then on top of that, you pay an amount into a long-term savings plan, so that you can pay off your mortgage at the end of the term of the plan.

The three main types of interest only mortgages are ISA, endowment and pension scheme.

ISA (Individual Savings Account) mortgage

This is one of three main types of interest only mortgage. You make regular payments to your lender to cover the interest on your mortgage, then on top of that, you pay an amount into an Individual Savings Account (ISA) which allows for you to save up to pay off the loan.

ISAs are tax-free savings and investment accounts.

With a leasehold property you only have ownership for a certain time period. This period will be stipulated within the lease and specify responsibility regarding maintenance and repair.

A small amount of ground rent will normally be payable to the land owner or freeholder.

If a property has a lease with less than 50 years remaining it, is generally considered as unwise to purchase.

Loan to Value (LTV)

This is the ratio, expressed as a percentage, of the value of your mortgage against the value of your property.

For example, a property worth £200,000 with a mortgage of £100,000 has an LTV of 50%.

The better mortgage deals tend to be available for those who are looking to borrow the smaller proportions relative to the total value of the property.


A mortgage is simply a loan taken out specifically to buy a property. Mortgages are provided by banks, building societies and specialist lending companies.

Remortgaging is where you change your lender or your repayment plan without moving house.

Negative equity

This is a less than desirable situation whereby your homes value has fallen to less than the value of the mortgage you have taken out to buy it.

This means that you would be unable to repay your mortgage by selling up and you are therefore stuck for options and unable to move.

Pension scheme mortgage

This is one of three main types of interest only mortgage whereby you use part of your pension to pay off the actual loan, as well as making regular payments to cover the interest on your mortgage.

The self-employed and higher rate taxpayers are generally better suited to this type of mortgage.

Pied à terre

In French, this means foot on the ground. In property, it refers to a property kept for temporary, secondary or occasional occupation.

Public liability insurance

This is sometimes included in your Building or Contents Insurance and it covers you should anyone suffer injury or death in or around your home. This includes things like injury to trespassers, children slipping when getting their ball back, and passers by being injured by falling objects.

Repayment mortgage

This is one of the two main classifications of mortgage, the other being interest only.

With a repayment mortgage, you make monthly payments to your mortgage provider for an agreed period (the term) until you have paid back both the loan and the interest on the loan.


When a loan is secured it means that failure to keep up with repayments will lead to the retrieval of the money by the selling of the item that your loan is secured against.

Mortgages are secured on your home, so failure to repay could see your home being sold so that the lender can retrieve the money.

A sitting tenant has a legal right to occupy a property even if the ownership has changed hands. They have the entitlement to apply for a fair rent to the local authority.

Properties that come with sitting tenants tend to demand less than a more flexible property that is free from occupancy.

Stamp duty

This is the government tax payable when purchasing property or shares. In the case of property, it is Stamp Duty Land Tax.

Generally you do not have to worry about Stamp Duty if you are paying less than £125,000, above this however and you qualify for the tax. Above this treshold, ratees increase the more you pay.

To get up to date information about whether you are required to pay stamp duty or whether you are exempt or qualify for special relief, visit

Standard variable rate mortgage

With this type of mortgage you will be making your repayments at a rate determined by your mortgage lender, with no deals or discounts.

The variable bit refers to the possible fluctuation of the rate, it may go up or down throughout the repayment course.

Subject to contract

If a deal is done, subject to contract, then it is not really done. Nothing should be taken for granted until the contracts are signed and the deal is legally binding.

Tenancy agreement

This legal document specifies the conditions of a rental agreement, including the rights of both the tenant and landlord.

Title deeds

The ownership of the property is outlined in these legal documents. They include anything to do with ownership rights, such as boundaries and rights of way.

A conveyancer will undertake a title search to ensure that there is nothing unusual listed in the legal documentation about the property that you are looking to purchase.

Tracker mortgage

Perhaps not as exciting as it sounds, this type of mortgage has an interest rate which is linked to the Bank of England rate, or another base rate.

The base rate will therefore determine the fluctuation of your mortgage repayment interest rate irrespective of the lender.

Under offer

This indicates that a property has had an offer accepted for it but the contracts have not yet been exchanged.


The vendor is simply the party that is selling the property.


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