Mortgage Glossary
Every mortgage and property term explained in plain English — no jargon, no waffle.
A
Abortive costs(Abortive Costs)
Legal and survey fees you have already paid that are lost if a property purchase falls through before exchange of contracts. In England and Wales there is no compensation right for abortive costs, unlike Scotland. Buyers should budget for the possibility of losing these costs if a deal collapses.
Adverse credit(Adverse Credit)
A term covering any negative items on your credit file — including missed payments, defaults, CCJs, IVAs, bankruptcy, and repossessions. Having adverse credit does not automatically disqualify you from a mortgage, but it does mean fewer lenders will consider you and the rates you are offered will be higher.
Adverse possession(Adverse Possession)
A legal process by which someone who has occupied land they do not own for a long enough period can apply to become the registered owner. In England and Wales, the period is typically 10-12 years for registered land. Also known as 'squatter's rights', it can create title complications that affect mortgage applications.
Affordability assessment(Mortgage Affordability Assessment)
The process a lender uses to decide whether you can afford the mortgage payments now and in the future. Considers your income (all sources), outgoings, committed expenditure, and the impact of a future interest rate rise. The rules for affordability assessment were updated by the FCA's Mortgage Market Review.
Agency worker(Agency Worker)
Someone employed through a recruitment agency on a temporary or rolling contract basis. Income can be accepted by some mortgage lenders but requires evidence of consistent earnings over a period (typically 12 months). Specialist lenders tend to be more flexible on employment type.
Agricultural tie(Agricultural Occupancy Condition)
A planning restriction on a property that limits who can live there — usually to people employed in agriculture or forestry in the local area. Severely restricts the buyer pool and makes standard mortgages difficult to obtain. Specialist lenders will consider these properties but expect higher rates and fewer options.
AIP(Agreement in Principle)
A statement from a lender saying they would probably lend you a certain amount based on basic checks. Not a guarantee of a mortgage offer. Also called a Decision in Principle (DIP) or mortgage promise. Usually valid for 60-90 days.
AML(Anti-Money Laundering)
Legal requirements that mortgage lenders, brokers, and solicitors must follow to verify the source of your funds. This is why you need to prove where your deposit came from, provide ID, and explain any large or unusual transactions. Enhanced checks apply to overseas funds.
Appointed representative(Appointed Representative (AR))
A mortgage broker or firm that operates under the regulatory umbrella of an FCA-authorised principal firm, rather than being directly FCA-authorised themselves. The principal firm takes responsibility for the AR's regulated activities. You have the same consumer protections as with a directly authorised broker.
APRC(Annual Percentage Rate of Charge)
The total cost of your mortgage over its full term, including fees and interest, expressed as a yearly percentage. Always higher than the headline interest rate because it factors in arrangement fees and the revert-to rate after any initial deal period ends.
Arrangement fee(Arrangement Fee)
A fee charged by the lender for setting up your mortgage, typically between GBP 500 and GBP 2,000. Can usually be added to the mortgage balance, but you will then pay interest on it for the full mortgage term. Sometimes called a product fee or completion fee.
Asbestos(Asbestos in Property)
A naturally occurring mineral formerly used widely in construction materials until it was banned in 1999. Common in properties built between 1950 and 1999. Undisturbed asbestos is not necessarily a barrier to mortgage lending, but exposed or friable asbestos may require professional removal before a lender proceeds.
ATED(Annual Tax on Enveloped Dwellings)
A tax paid annually by companies that own UK residential properties worth more than GBP 500,000. Designed to discourage holding property in corporate 'envelopes' to avoid stamp duty. Most homeowners are not affected — this is mainly relevant to investors using company structures.
Auction(Property Auction)
A method of selling property where buyers bid competitively. In a traditional auction, exchange happens on the fall of the hammer and completion is required within 28 days. In the Modern Method of Auction (MMoA), you exchange within 28 days and complete within a further 28 days, giving more time to arrange finance.
B
Bankruptcy
The most severe form of personal insolvency in England and Wales. You are typically discharged after 12 months, but it remains on your credit file for 6 years from the date of the bankruptcy order. Undischarged bankrupts cannot legally take out credit above GBP 500 without disclosing their status.
Base rate(Bank of England Base Rate)
The interest rate set by the Bank of England that influences what lenders charge borrowers. When the base rate goes up, tracker mortgages increase immediately, and fixed-rate deals for new borrowers usually follow. Your existing fixed rate is not affected until your deal ends.
Beneficial interest(Beneficial Interest)
The right to benefit from a property even if you are not the legal registered owner. Arises in cases of common intention constructive trusts, typically between unmarried partners. A beneficial interest can affect mortgage applications and must be disclosed to lenders as it can complicate the security.
BISF(British Iron and Steel Federation House)
A type of steel-framed prefabricated house built in the 1940s-1950s as post-war emergency housing. Classified as non-standard construction, meaning most high-street lenders will not offer mortgages on them. Specialist lenders do exist, but rates are higher and valuations must be carefully considered.
BNPL(Buy Now Pay Later)
Short-term credit offered by services like Klarna, Clearpay, and PayPal Credit. Since 2023-2024, many BNPL providers now report to credit reference agencies, meaning outstanding BNPL can appear on your credit file and affect mortgage affordability assessments.
Bounce Back Loan(Bounce Back Loan Scheme (BBLS))
A government-backed emergency loan of up to GBP 50,000 offered to small businesses during the Covid-19 pandemic. Some mortgage lenders treat an outstanding Bounce Back Loan as a business liability that affects affordability calculations. Self-employed borrowers with BBLS should declare it on mortgage applications.
Breathing Space(Breathing Space (Debt Respite Scheme))
A government scheme giving people in serious debt problem a 60-day period (or longer for those in mental health crisis treatment) during which creditors cannot add interest, fees, or take enforcement action. Gives you time to get debt advice. Recorded on your credit file and can affect mortgage applications.
Bridging loan(Bridging Loan)
A short-term loan (typically 1-18 months) used to bridge a gap — for example, buying a new property before selling your current one. Interest rates are much higher than standard mortgages, typically 0.4-1.5% per month. Intended as temporary finance, not a long-term solution.
Building regulations(Building Regulations)
Legal standards for the design and construction of buildings in England and Wales, covering structural integrity, fire safety, energy efficiency, and drainage. Work requiring building regulations approval must be inspected and signed off. Missing sign-off paperwork is a title defect that lenders may require to be resolved before lending.
Buildings insurance(Buildings Insurance)
Insurance that covers the structure of your home against damage from fire, flood, subsidence, and other events. Mortgage lenders require you to have it in place from exchange of contracts. For leasehold flats, buildings insurance is usually arranged by the freeholder and included in your service charge.
Buy-to-let(Buy-to-Let Mortgage)
A mortgage specifically for properties you intend to rent out rather than live in. Affordability is usually based on expected rental income rather than your personal income. Typically requires a larger deposit (at least 25%), higher fees, and higher interest rates than residential mortgages.
C
Capital Gains Tax(Capital Gains Tax (CGT))
A tax on the profit you make when you sell an asset — including property — that has increased in value. Your main home is usually exempt through Private Residence Relief. CGT is payable on investment properties, second homes, and buy-to-let properties. The rate for residential property is 18% (basic rate) or 24% (higher rate).
Cash buyer(Cash Buyer)
A buyer who does not need a mortgage to purchase a property. Cash buyers can complete faster, are not subject to mortgage surveys or lender conditions, and are attractive to sellers of difficult properties. Professional cash buying companies offer quick completions but typically pay 75-85% of market value.
CCJ(County Court Judgement)
A court order registered against you when a creditor takes you to court for an unpaid debt and wins. Stays on your credit file for 6 years from the date of judgement. If paid within one month of the judgement, it can be removed from the register entirely.
CGT(Capital Gains Tax)
See Capital Gains Tax. The profit element of selling a property (minus your main home) is subject to this tax. Higher and additional rate taxpayers pay 24% on residential property gains. You have an annual exempt amount before CGT kicks in.
Chain(Property Chain)
A series of linked property transactions where each purchase depends on the previous sale completing. If one party in the chain drops out, all transactions can collapse. Chains are a common source of delays and failed sales in England and Wales. Being chain-free (a first-time buyer or cash buyer) is attractive to sellers.
Chain break(Chain Break)
When a property chain collapses because one party pulls out, causing all linked transactions to fail. Can leave buyers and sellers facing abortive legal fees, re-listing costs, and the need to find a new buyer or property. Buying through auction or using a bridging loan are ways to protect against chain break.
Charging order(Charging Order)
A court order that converts an unsecured debt (such as a CCJ) into a secured debt against your property. If you sell the property, the debt must be repaid from the proceeds. A charging order does not force you to sell, but an order for sale can follow if you do not repay. Appears on your credit file and the Land Register.
CIFAS(CIFAS Marker)
A fraud prevention marker placed on your credit file, either because you have been a victim of fraud (protective registration) or because you have been involved in fraudulent activity (filed by a member organisation). A CIFAS marker can make it difficult to open bank accounts or get credit. Protective registrations should not negatively affect mortgage applications.
Cladding(Cladding (Fire Safety))
The external covering applied to the walls of buildings. Certain types of combustible cladding (similar to that on Grenfell Tower) create a fire safety risk and make affected flats difficult or impossible to mortgage without an EWS1 certificate confirming the risk level. Remediation programmes are ongoing.
CLC(Council for Licensed Conveyancers)
The regulator for licensed conveyancers in England and Wales — specialist property lawyers who can handle conveyancing but are not solicitors. CLC-regulated firms offer an alternative to solicitors for property transactions and may sometimes be cheaper. All conveyancers must be either CLC or SRA regulated.
Coal Authority
A government body that manages the legacy of coal mining in the UK, including mine entries, subsidence, and contamination. In coal mining areas, a Coal Authority search is part of the conveyancing process and can reveal subsidence risk. Properties in mining areas may need specialist mortgage lenders.
Coastal erosion(Coastal Erosion Risk)
The gradual wearing away of land at the coast by wave action, tidal currents, and storms. Properties in managed retreat zones may have no long-term future. Many lenders will not offer standard mortgages on properties classified as at serious risk of coastal erosion.
Collective enfranchisement(Collective Enfranchisement)
The right for leaseholders in a building to join together and buy the freehold of their building from the freeholder. Requires the support of at least 50% of qualifying tenants. Once you own the freehold collectively, you control the building management, can extend leases cheaply, and eliminate ground rent.
Commission income(Commission Income)
Earnings from variable performance-related pay, such as sales commission. Lenders vary significantly in how they treat commission — some use a two-year average, others only accept a percentage of basic salary. Having consistent commission history evidenced on payslips and P60s improves acceptance chances.
Commonhold
An alternative to leasehold for flats where each flat owner also owns a share of the common parts and the building management company, with no expiring lease or freeholder. Very rare in practice — most UK flats are still leasehold. The government has proposed making commonhold the default for new flats.
Completion
The final stage of buying a property, when the purchase money is transferred, the keys are handed over, and you legally become the owner. Typically happens 1-4 weeks after exchange of contracts. Your mortgage payments usually start from the first of the month following completion.
Concrete construction(Non-Standard Concrete Construction)
Properties built using prefabricated concrete panels or systems (such as Cornish Unit, Wimpey No-Fines, or Airey houses) rather than traditional brick and mortar. Classified as non-standard construction. Many high-street lenders will not lend on these without specialist structural reports, and some types remain very difficult to mortgage.
Consent to let(Consent to Let)
Permission from your existing mortgage lender to temporarily rent out your property without switching to a buy-to-let mortgage. Usually granted for 12 months at a time and may come with a small interest rate increase. Required if you need to move temporarily for work or personal reasons.
Consumer Duty(FCA Consumer Duty)
A set of FCA rules introduced in 2023 requiring financial firms to act to deliver good outcomes for retail customers. Lenders and brokers must now prove their products and services are suitable, offer fair value, and that customers understand what they are buying. Raises the bar for mortgage advice quality.
Contractor mortgage(Contractor Mortgage)
A mortgage for people who work on fixed-term contracts or through a limited company. Day rate is often used to calculate income rather than salary. Many mainstream lenders struggle with contractor income — specialist lenders and brokers who understand contractor structures get better results.
Conveyancer(Conveyancer / Conveyancing Solicitor)
A legal professional who handles the legal side of buying or selling a property — including searches, contracts, transferring ownership, and registering the mortgage. Can be a solicitor or a licensed conveyancer. Costs typically range from GBP 800 to GBP 2,000 including searches and disbursements.
Conveyancing Quality Scheme(Conveyancing Quality Scheme (CQS))
A Law Society accreditation scheme for conveyancing solicitor firms that meet quality standards in property transactions. Many mortgage lenders require you to use a CQS-accredited firm. Look for the CQS logo when choosing a solicitor to ensure they are on most lender panels.
Credit builder card(Credit Builder Card)
A credit card designed for people with poor or no credit history. Comes with a low credit limit and high interest rate, but if you use it for small purchases and pay off in full each month, it builds a positive payment history on your credit file. Common options include Aqua, Capital One, and Vanquis.
Credit score(Credit Score)
A number calculated by credit reference agencies (Experian, Equifax, TransUnion) to indicate how reliable a borrower you appear to be, based on your credit history. Different agencies use different scales. Lenders do not use this score directly — they use their own internal scoring based on your raw credit data.
Credit utilisation(Credit Utilisation)
The percentage of your available credit that you are currently using. For example, if you have a credit card limit of GBP 5,000 and a balance of GBP 2,500, your utilisation is 50%. Lenders and credit agencies prefer to see utilisation below 30%. High utilisation can lower your credit score even if you pay on time.
Crypto income(Cryptocurrency Income and Deposits)
Income or deposit funds sourced from cryptocurrency trading or holdings. Almost all mainstream lenders will not accept crypto as a deposit source or include crypto gains in income calculations. A small number of specialist lenders may consider it if funds have been held in a standard bank account for 3+ months.
D
Damp(Damp (Property))
Moisture penetrating or rising through walls, floors, or ceilings in a property. Types include rising damp, penetrating damp, and condensation. Significant damp can cause structural problems and may make a property difficult to mortgage without remediation. Lenders may impose a retention until work is completed.
Deed of trust(Deed of Trust)
A legal document specifying what share of a property each owner holds, and how the proceeds should be divided on sale. Important when owners are contributing unequal deposits or where one owner is not on the mortgage. Also known as a Declaration of Trust.
Default(Default Notice)
A formal notice issued by a creditor when you fall significantly behind on payments, typically after 3-6 missed payments. Once registered on your credit file, a default stays for 6 years from the date it was recorded, regardless of whether you subsequently pay it off. Satisfied (paid) defaults are viewed more favourably than unsatisfied ones.
Deposit(Mortgage Deposit)
The amount of money you put towards the property purchase yourself, with the mortgage covering the rest. Expressed as a percentage of the property value. A larger deposit means a lower LTV ratio, which typically gets you a better interest rate and more lender options.
Derelict property(Derelict Property)
A property that is in severe disrepair and uninhabitable. Standard mortgage lenders will not lend on derelict properties. Options include bridging finance, development finance, or cash purchase, followed by a remortgage once the property is habitable. Planning permission and building regulations approval may also be needed.
Development finance(Development Finance)
A specialist form of lending used to fund property development projects, from small conversions to large residential developments. Typically released in stages as work progresses. Higher rates than standard mortgages but essential for developers who cannot fund a project from cash alone.
DIP(Decision in Principle)
The same thing as an Agreement in Principle (AIP) — a preliminary indication from a lender of how much they would be willing to lend you. Some lenders use a soft credit check (which does not affect your score) while others use a hard check, so always ask first.
Discount mortgage(Discount Rate Mortgage)
A mortgage where the interest rate is set at a discount below the lender's Standard Variable Rate (SVR) for a fixed period. Unlike a tracker, it does not move directly with the Bank of England base rate — it moves with the lender's SVR, which the lender can change at any time.
DMP(Debt Management Plan)
An informal agreement with your creditors to repay debts at a reduced rate, usually arranged through a debt charity like StepChange. Unlike an IVA, it is not legally binding. While less severe than an IVA, it still appears on your credit file through the missed payments and reduced payments that accompany it.
Down-valuation(Down-Valuation)
When a mortgage lender's valuer assesses a property as being worth less than the agreed purchase price. The lender will only lend based on the lower valuation, meaning you need a bigger deposit to make up the difference. Most common in markets with rapidly rising prices or for unusual property types.
DRO(Debt Relief Order)
A form of insolvency for people with debts under GBP 30,000, assets under GBP 2,000, and disposable income under GBP 75 per month. Lasts 12 months, after which qualifying debts are written off. Stays on your credit file for 6 years and makes getting a mortgage very difficult during that period.
Dry rot(Dry Rot (Timber Decay))
A serious fungal decay affecting timber in buildings. Unlike wet rot, dry rot can spread beyond wet areas through masonry, making it particularly destructive and expensive to treat. Lenders may refuse a mortgage or impose a retention until dry rot is professionally treated and certified.
DWP(Department for Work and Pensions)
The government department responsible for welfare, pensions, and child support. Administers benefits including Universal Credit, PIP, ESA, and Support for Mortgage Interest. Some lenders require DWP award letters as evidence of benefit income for mortgage affordability assessments.
E
Easement(Easement / Right of Way)
A legal right that allows someone to use part of another person's land for a specific purpose, such as a right of way footpath or drainage. Easements attach to the land and pass to new owners automatically. An undisclosed easement is a title defect that can complicate mortgage applications.
Enfranchisement(Leasehold Enfranchisement)
The legal right for leaseholders to purchase the freehold of their building, either individually (for houses) or collectively with other leaseholders (for flats). The cost depends on the property value, remaining lease length, and ground rent. The Leasehold and Freehold Reform Act 2024 aims to make this cheaper and easier.
Environment Agency
The government body responsible for protecting and improving the environment in England, including flood risk mapping. Their flood zone maps are the primary source used by lenders and insurers when assessing flood risk for a property. Flood zone 3 properties face the most restrictions.
EPC(Energy Performance Certificate)
A rating of a property's energy efficiency from A (most efficient) to G (least efficient). Required by law when selling or renting a property. Valid for 10 years. Proposed regulations may require a minimum EPC rating of C for new tenancies, which could also affect mortgage lending in future.
Equity
The portion of the property you actually own outright — the difference between the property's current market value and the amount you still owe on the mortgage. Equity increases as you pay down the mortgage and as the property's value rises. Negative equity means you owe more than the property is worth.
Equity release(Equity Release)
A way for homeowners typically aged 55 or over to access the equity in their home without selling it. Includes lifetime mortgages (you retain ownership) and home reversion plans (you sell part or all of your home). The loan plus interest is repaid when you die or move into care. Must be advised by an Equity Release Council member.
ERC(Early Repayment Charge)
A penalty charged by the lender if you repay your mortgage (or overpay beyond your allowance) during the initial deal period. Typically 1-5% of the outstanding balance, decreasing each year. Always check your ERC schedule before remortgaging, overpaying, or selling during your deal period.
EWS1(External Wall System Form)
A fire safety assessment form for the external walls of residential buildings, introduced after Grenfell. An A rating means no cladding investigation needed. B1 means cladding present but no remediation needed. B2 means remediation is required. Without a satisfactory EWS1, most lenders will not offer a mortgage on affected flats.
Ex-council property(Ex-Council / Former Local Authority Property)
A property that was originally built and owned by a local authority and subsequently sold, usually through Right to Buy. Some ex-council properties in certain locations or of certain construction types attract fewer lenders. High-rise ex-council blocks can be particularly difficult to mortgage.
Exchange(Exchange of Contracts)
The point in the property buying process where the transaction becomes legally binding. After exchange, pulling out will cost you your deposit (typically 10% of the purchase price). Completion usually follows 1-4 weeks later. Your solicitor handles the exchange.
Execution-only(Execution-Only Mortgage)
A mortgage arranged without advice — you choose the product yourself and the broker or lender simply processes the application. You lose the protection of regulated advice and cannot complain if the product turns out to be unsuitable. Only appropriate for mortgage professionals or highly experienced borrowers.
Expat mortgage(Expat Mortgage)
A mortgage for UK nationals living and working abroad who want to buy property in the UK, either as a home to return to or as an investment. Not all lenders offer expat mortgages. Income in foreign currencies and income earned overseas can make affordability assessments complex.
F
FCA(Financial Conduct Authority)
The UK regulator for financial services firms, including mortgage lenders and brokers. Ensures firms treat customers fairly and follow rules on advice, disclosure, and complaints. Any mortgage broker you use should be FCA-authorised — check at register.fca.org.uk.
Financial association(Financial Association)
A link on your credit file to another person created by joint financial products like joint accounts, joint mortgages, or joint loans. Your associate's credit history can affect your mortgage application. To remove an association with an ex-partner, close all joint accounts and request a financial disassociation from each credit agency.
First Homes(First Homes Scheme)
A government scheme offering newly built homes to first-time buyers at a discount of at least 30% below market value. The discount is permanent and transfers to future buyers (who must also be eligible first-time buyers). Most standard mortgage lenders accept First Homes properties.
Fixed rate(Fixed Rate Mortgage)
A mortgage where the interest rate is locked in for a set period, typically 2 or 5 years. Your monthly payments stay the same regardless of what happens to the Bank of England base rate during that period. When the fix ends, you revert to the lender's SVR (usually much higher), so most people remortgage before that happens.
Flood Re(Flood Re Reinsurance Scheme)
A government-backed scheme that helps make flood insurance affordable for homes in high-risk flood areas. Introduced in 2016, it caps the flood element of buildings insurance premiums based on council tax band. Most residential properties built before 2009 are eligible.
Flood risk(Flood Risk)
The risk of a property being flooded, categorised by the Environment Agency into Flood Zones 1, 2, and 3. Zone 3 properties (high risk) face the most challenges getting a mortgage and insurance. Flood Re helps with insurance but lender appetite varies. Flood defences and historical flooding records also matter.
Flying freehold(Flying Freehold)
A part of a freehold property that extends over or under a neighbouring property — for example, a room above a shared passageway. Problematic for mortgages because positive covenants (obligations to maintain) cannot be enforced against future owners of freehold land. Indemnity insurance is usually required.
Forces Help to Buy(Forces Help to Buy Scheme)
A Ministry of Defence scheme allowing armed forces personnel to borrow up to 50% of their salary (interest-free, up to GBP 25,000) towards buying a home. Repaid over 10 years from salary. Can be combined with other government schemes and used for deposits.
FOS(Financial Ombudsman Service)
An independent body that resolves complaints between consumers and financial firms, including mortgage lenders and brokers. Free to use for consumers. If your complaint to a firm is rejected or unresolved after 8 weeks, you can refer to the FOS. Can award compensation up to GBP 430,000.
Freehold
Outright ownership of both the property and the land it sits on, with no time limit. Most houses in England and Wales are freehold. Freehold means no ground rent, no lease to expire, and no freeholder to deal with — you have complete control, subject to planning regulations.
FSCS(Financial Services Compensation Scheme)
The UK's statutory compensation scheme for customers of authorised financial services firms that have failed. Covers up to GBP 85,000 per person per firm for deposits, and up to GBP 85,000 for investment and mortgage advice claims. If your mortgage broker goes bust, FSCS may cover losses from bad advice.
Further advance(Further Advance)
An additional loan from your existing mortgage lender, secured against the same property as your current mortgage. Unlike a second charge, it sits with the same lender on the same security. Often used for home improvements or to consolidate debt. You need to pass a fresh affordability assessment.
G
Gambling transactions(Gambling Transactions)
Deposits or withdrawals related to gambling appearing on bank statements. Lenders review bank statements for the past 3-6 months and view regular gambling as a risk indicator. Reducing or stopping gambling in the months before applying improves prospects significantly.
Gazumping
When a seller accepts your offer on a property but then accepts a higher offer from someone else before contracts are exchanged. Legal in England and Wales because the sale is not legally binding until exchange of contracts. Scotland has a different system where offers become binding earlier.
Gazundering
When a buyer reduces their offer at the last minute before exchange — often after the seller has already committed to a purchase. Legal but controversial. More common in a falling market or where a buyer has used the surveys to justify a lower price.
Gifted deposit(Gifted Deposit)
Money given to you by a family member (or occasionally a third party) to use as your mortgage deposit, with no expectation of repayment. The donor must sign a letter confirming it is a gift and they will have no interest in the property. Most lenders accept gifts from immediate family; fewer accept gifts from friends or distant relatives.
Green mortgage(Green Mortgage)
A mortgage product offering a lower interest rate or cashback incentive for properties with a high EPC rating (usually A or B). Increasingly common as lenders align with net zero targets. Some lenders also offer green further advances to fund energy efficiency improvements.
Ground rent(Ground Rent)
An annual charge paid by a leaseholder to the freeholder. On older leases, ground rent may double every 10-25 years, which has caused the leasehold scandal. The Leasehold Reform (Ground Rent) Act 2022 capped ground rent on new leases to a peppercorn (effectively zero). Existing leases with escalating ground rent remain problematic.
Guarantor mortgage(Guarantor Mortgage)
A mortgage where a family member (the guarantor) agrees to cover payments if you cannot. The guarantor's property or savings may be used as security. This helps borrowers who cannot meet affordability criteria on their own. The guarantor takes on a significant legal and financial commitment.
H
Hard search(Hard Credit Search)
A full credit check that leaves a visible mark on your credit file, seen by other lenders. Multiple hard searches in a short period can lower your credit score because it may suggest you are desperate for credit. Always ask lenders whether their AIP/DIP involves a hard or soft search.
Hard-to-sell property(Hard-to-Sell Property)
A property that is difficult to sell through conventional estate agents, usually because of structural issues, unusual construction, legal problems, location, or sitting tenants. Options include specialist estate agents, property auctions, and cash buying companies.
Help to Buy(Help to Buy Equity Loan)
A government scheme (now closed to new applicants in England) where the government lent up to 20% (40% in London) of the purchase price of a new-build home, interest-free for 5 years. Existing borrowers still have equity loans to manage — interest charges begin in year 6 at 1.75%, increasing annually by RPI plus 1%.
Help to Buy ISA
A savings account for first-time buyers (closed to new accounts since 2019) where the government added a 25% bonus when used towards a property purchase. Existing accounts can still be saved into until 2029 and claimed until 2030. Maximum bonus is GBP 3,000 on GBP 12,000 of savings.
HMRC(HM Revenue and Customs)
The UK government department responsible for collecting taxes, including stamp duty land tax (SDLT), capital gains tax, and income tax. Self-employed borrowers need HMRC documents (SA302, tax year overviews) as evidence of income for mortgage applications.
Homes England
The government's housing delivery agency in England, responsible for administering schemes including Help to Buy, First Homes, Shared Ownership, and the Mortgage Guarantee Scheme. Provides guidance on eligibility and manages the portal for first-time buyer scheme applications.
Houseboat(Houseboat / Floating Home)
A boat used as a permanent residence, moored in a marina or on a river. Mainstream mortgage lenders will not lend on houseboats — they are not real property. Some specialist lenders offer marine mortgages or marine finance. Moorings may be leasehold and have their own complications.
I
Identity theft(Identity Theft)
When fraudsters use your personal details to open credit accounts in your name, potentially leaving unexplained CCJs, defaults, or accounts on your credit file. Victims can use CIFAS protective registration and add Notices of Correction to their credit file.
IHT(Inheritance Tax)
A tax on the estate of someone who has died. The standard rate is 40% on the value above the nil-rate band (GBP 325,000, or up to GBP 500,000 with the residence nil-rate band if leaving a home to children). Property value forms a significant part of most estates and IHT planning often involves property.
Indemnity insurance(Indemnity Insurance (Property))
A one-off insurance policy taken out when buying a property to protect against legal risks — such as missing planning permission documents, title defects, flying freeholds, or restrictive covenants. Typically costs GBP 50-500 and is often required by lenders to proceed with a mortgage where a title issue exists.
Insurance-backed guarantee(Insurance-Backed Guarantee (IBG))
A warranty provided by a specialist insurer covering building works such as extensions, roof replacements, or damp treatment. Unlike a contractor guarantee, an IBG transfers to new owners and remains valid even if the original contractor goes out of business. Many lenders require an IBG for major works on a property.
Interest-only mortgage(Interest-Only Mortgage)
A mortgage where your monthly payments cover only the interest, not the capital. At the end of the term, you still owe the original loan amount. Lenders require a credible repayment strategy (such as an investment or planned property sale). Stricter criteria apply since the Mortgage Market Review.
IR35(IR35 (Off-Payroll Working Rules))
Tax legislation determining whether contractors working through limited companies should be treated as employees for tax purposes. Being inside IR35 means the end client deducts tax at source. IR35 status affects how lenders assess income — some treat inside-IR35 contractors as employed, others as self-employed.
IVA(Individual Voluntary Arrangement)
A formal, legally binding agreement between you and your creditors to repay part of your debts over a fixed period, usually 5-6 years. An alternative to bankruptcy. Recorded on the Insolvency Register and your credit file. Remaining debts are written off once the IVA is completed successfully.
J
Japanese knotweed(Japanese Knotweed)
An invasive plant species that can damage building foundations, drainage, and paving. Must be disclosed on the TA6 property information form. Many lenders will not mortgage a property if Japanese knotweed is within 7 metres of the structure unless a professional management plan is in place.
JBSP(Joint Borrower Sole Proprietor)
A mortgage where multiple people (typically parents and child) are jointly responsible for the mortgage payments, but only one person (the child) owns the property. This lets parents boost the borrowing power without being on the property deeds, avoiding second-home stamp duty surcharges.
K
KFI(Key Facts Illustration)
A standardised document that lenders must provide showing the key details of a mortgage product, including the interest rate, monthly payments, total amount payable, fees, and what happens when the deal period ends. Designed to make it easy to compare products from different lenders on a like-for-like basis.
L
Land Registry(HM Land Registry)
The government body that records ownership and charges on all registered land and property in England and Wales. Your ownership and your lender's charge are both recorded here. Title deeds are digital. You can search the Land Registry online to see ownership, price paid, and charges on any registered property.
Law Society
The representative body for solicitors in England and Wales, which also maintains a directory of solicitor firms and runs the Conveyancing Quality Scheme (CQS). If you have a complaint about a solicitor, you can report it to the Solicitors Regulation Authority (SRA).
LBTT(Land and Buildings Transaction Tax)
Scotland's equivalent of stamp duty land tax, charged when buying property in Scotland. Different rates and thresholds apply, including a 6% Additional Dwelling Supplement for second homes and buy-to-let purchases. The residential threshold starts at GBP 145,000 for standard purchases.
Leasehold
Ownership of a property for a fixed period (the lease term), while someone else (the freeholder) owns the land. Most flats in England and Wales are leasehold. You may pay ground rent and service charges to the freeholder. When the lease expires, ownership reverts to the freeholder, though you have rights to extend.
Let-to-buy(Let-to-Buy)
An arrangement where you let out your current home and use the equity in it to fund a deposit on a new property. Requires consent to let (or switching to a buy-to-let mortgage) on the existing home, and a new residential mortgage for the new purchase. Affordability is assessed on both properties.
LISA(Lifetime ISA)
A savings account for first-time buyers under 40 where the government adds a 25% bonus on contributions up to GBP 4,000 per year. Can be used towards a property costing up to GBP 450,000. Withdrawing for any other purpose incurs a 25% penalty, which means you lose some of your own money as well as the bonus.
Listed building(Listed Building)
A building recognised for its special architectural or historic interest, protected under the Planning (Listed Buildings and Conservation Areas) Act 1990. Listed buildings can be mortgaged but insurance is more expensive (higher reinstatement value), alterations need listed building consent, and some lenders are cautious about the maintenance liability.
LTV(Loan to Value)
The size of your mortgage expressed as a percentage of the property's value. A GBP 180,000 mortgage on a GBP 200,000 property is 90% LTV. Lower LTV means a bigger deposit and typically gets you better interest rates. Most lenders offer their best rates at 60% LTV or below.
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Marriage value(Marriage Value (Leasehold))
The increase in the value of a property that results from extending a short lease. When a lease drops below 80 years, the leaseholder must pay 50% of the marriage value to the freeholder as part of the lease extension cost. The Leasehold and Freehold Reform Act 2024 proposes to abolish marriage value, though implementation dates vary.
MCOB(Mortgage Conduct of Business Rules)
The FCA's rulebook for the regulated mortgage market, setting out what lenders and brokers must do when selling mortgage products. Covers affordability assessments, advice standards, disclosure requirements, and arrears handling. Replaced earlier rules following the Mortgage Market Review in 2014.
MIG(Mortgage Indemnity Guarantee)
An insurance policy that protects the lender (not you) if they have to repossess and sell your property for less than the outstanding mortgage. Sometimes charged to borrowers at high LTV (typically 90%+). Less common now than in previous decades, but some lenders still charge it or build the cost into their rates.
Misrepresentation
Making a false statement of fact that induces another party to enter into a contract. In property sales, sellers can face legal claims if they provide inaccurate information on the TA6 form. On mortgage applications, misrepresentation can lead to the loan being recalled and criminal prosecution.
Missives(Missives (Scotland))
The Scottish equivalent of exchange of contracts. A series of formal letters between buyer's and seller's solicitors that form a binding contract when concluded. Scottish property transactions become legally binding earlier in the process than in England and Wales, making gazumping much less common.
MMoA(Modern Method of Auction)
An online auction format where the winning bidder pays a reservation fee and has 28 days to exchange contracts and a further 28 days to complete. Unlike traditional auction, you have time to arrange mortgage finance. However, you lose your reservation fee if you fail to exchange — and getting a mortgage on auction property in time is not always guaranteed.
MoneyHelper(MoneyHelper (MaPS))
The UK government's free financial guidance service, run by the Money and Pensions Service. Provides impartial information on mortgages, debt, benefits, and budgeting. Also runs the Breathing Space scheme referral process. Not a regulator or advice firm — they provide information but not personalised advice.
Mortgage arrears(Mortgage Arrears)
When you have missed one or more mortgage payments and fall behind on your balance. Even one missed payment is recorded on your credit file and can affect future applications. Lenders must follow a formal process before taking repossession action, including offering you the chance to come to an arrangement.
Mortgage Charter(Mortgage Charter (2023))
An agreement between the UK government and major mortgage lenders introduced in 2023 to help borrowers struggling with rising mortgage costs. Lenders signed up committed to allow term extensions, interest-only switches, and a 12-month buffer before repossession. Check if your lender signed up.
Mortgage deed(Mortgage Deed)
The legal document you sign that gives the lender a legal charge over your property as security for the loan. This is what allows the lender to repossess the property if you fail to keep up repayments. It is registered with the Land Registry alongside the property ownership.
Mortgage Guarantee Scheme
A government scheme where the government provides a guarantee to lenders offering 95% LTV mortgages. Allows buyers with a 5% deposit to access mortgage products that lenders would otherwise be unwilling to offer. Helps first-time buyers and home movers who have been saving but cannot build a larger deposit.
Mortgage offer(Mortgage Offer)
The formal written confirmation from a lender that they will lend you a specified amount on a specified property under specified conditions. Usually valid for 3-6 months. Only issued after full underwriting, valuation, and any conditions are met. Not the same as an AIP — this is a real commitment from the lender.
Mortgage prisoner(Mortgage Prisoner)
Someone trapped on their existing mortgage deal — often a high SVR — because they cannot pass current affordability checks to remortgage, even though they have been making payments without problems for years. Often affects borrowers whose loans were sold by failed lenders (like Northern Rock) to inactive lenders or investment funds.
Mortgage retention(Mortgage Retention)
When a lender holds back part of the mortgage offer until specific work is completed on a property. For example, if the valuer notes damp or structural issues, the lender may release 90% of the funds on completion but retain 10% until a remediation certificate is provided.
MPPI(Mortgage Payment Protection Insurance)
Insurance that covers your mortgage payments if you cannot work due to accident, illness, or redundancy. Premiums are typically GBP 4-8 per GBP 100 of monthly benefit. Policies have waiting periods (usually 30-90 days) and benefit periods (typically 12-24 months). Distinct from life insurance and critical illness cover.
Multiple credit issues(Multiple Credit Issues)
Having more than one type of adverse credit — for example, a CCJ and a default, or an IVA and missed payments. The more severe and recent the issues, the fewer lenders will consider you. Specialist adverse credit lenders are categorised by tiers based on the types and recency of credit problems they will accept.
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NAPB(National Association of Property Buyers)
The trade body representing professional cash house buyers in the UK. Members commit to a code of practice covering transparency on pricing and fees. If selling to a cash buying company, check whether they are NAPB members as a basic quality indicator.
Negative equity(Negative Equity)
When your property is worth less than the outstanding mortgage balance. For example, if you owe GBP 200,000 but the property is only worth GBP 180,000, you have GBP 20,000 of negative equity. This makes it very difficult to remortgage or sell without making up the shortfall from savings.
New build(New Build Property)
A newly constructed property bought from a developer, often before it is completed (off-plan). New builds have specific mortgage considerations: many lenders apply a lower maximum LTV (typically 85%), mortgage offers often expire before completion, and some lenders do not lend on new builds at all.
NHBC(National House Building Council)
The main provider of new home warranties in the UK. An NHBC Buildmark warranty covers structural defects for 10 years on new-build homes. Most mortgage lenders require either an NHBC warranty or equivalent (such as LABC, Premier Guarantee, or Zurich) before they will lend on a new build.
Non-standard construction(Non-Standard Construction)
Any property not built from traditional brick or stone walls with a pitched tile or slate roof. Includes concrete, steel frame, prefabricated timber, thatched roofs, and more. Non-standard construction properties are harder to mortgage and insure, and specialist valuers and lenders are needed in most cases.
Notice of Correction
A short statement (up to 200 words) you can add to your credit file to explain a specific entry. For example, explaining that missed payments were due to a period of serious illness. Any lender who searches your file and sees the notice must read it before making a decision. Free to add via each credit reference agency.
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Offset mortgage(Offset Mortgage)
A mortgage linked to your savings account, where your savings balance is deducted from your mortgage balance for the purpose of calculating interest. If you have a GBP 200,000 mortgage and GBP 30,000 in savings, you only pay interest on GBP 170,000. Your savings do not earn interest but the tax-free mortgage interest saving can be more valuable.
Overpayment(Mortgage Overpayment)
Paying more than your required monthly mortgage payment to reduce the capital balance faster. Most lenders allow overpayments of up to 10% of the outstanding balance per year without charge during a fixed rate. Overpaying reduces total interest paid and the time to pay off the mortgage.
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Park home(Park Home)
A factory-built mobile home sited on a privately owned plot in a licensed residential park. Not mortgageable through standard mortgage lenders. Specialist finance (not a traditional mortgage) is available. Residents own the home but not the land, and pay a pitch fee to the site owner.
Party wall(Party Wall Act 1996)
Legislation governing works affecting shared walls, boundary walls, and excavations near neighbouring buildings. If your planned works fall under the Act, you must serve a party wall notice on neighbours before starting. Disputes are resolved by a party wall surveyor. Can complicate property sales if notices were not served correctly.
Payday loan(Payday Loan)
A high-cost short-term loan with very high interest rates, typically repaid on your next payday. Many mortgage lenders will decline applicants who have used payday loans in the past 1-6 years, seeing them as a sign of financial distress. Specialist lenders may consider applications, typically 12-24 months after the last payday loan.
Pension income(Pension Income)
Income received from a defined benefit pension, annuity, or drawdown in retirement. Most lenders accept pension income for mortgage affordability, though maximum age at the end of the term varies by lender. Retirement interest-only and equity release products are also designed for those primarily relying on pension income.
PIP(Personal Independence Payment)
A benefit for people with long-term health conditions or disabilities, replacing Disability Living Allowance (DLA) for adults. Not means-tested and not affected by savings or other income. Some mortgage lenders accept PIP as income for affordability purposes, though policies vary.
Planning permission(Planning Permission)
Formal consent from a local authority to carry out development on land or buildings. Required for most significant building works. Carrying out development without permission or in breach of conditions is a material fact that must be disclosed and can make a property unmortgageable until it is regularised.
Portfolio landlord(Portfolio Landlord)
A buy-to-let landlord who owns four or more mortgaged buy-to-let properties. Portfolio landlords face stricter underwriting since 2017 PRA rules — lenders must stress-test the entire portfolio, not just the individual property being financed. Specialist portfolio lenders are often the most competitive option.
Porting(Porting a Mortgage)
Moving your existing mortgage deal to a new property when you move house, rather than paying an early repayment charge and taking a new deal. Most mortgage offers are portable in theory, but you still need to pass the lender's affordability checks for the new property and loan amount.
Power of Attorney
A legal document giving one person (the attorney) authority to act on behalf of another (the donor). A Lasting Power of Attorney (LPA) for property and financial affairs allows the attorney to manage property transactions and mortgages if the donor loses mental capacity. Lenders require original LPA registration documents.
PRA(Prudential Regulation Authority)
Part of the Bank of England, responsible for the financial stability of major financial institutions including banks and building societies. The PRA sets capital requirements and stress tests for lenders, which in turn shapes how conservatively or aggressively lenders offer mortgage products.
Pre-action protocol(Pre-Action Protocol for Mortgage Arrears)
A set of steps that lenders must follow before applying to court to repossess a property. Requires lenders to contact you, consider alternative arrangements, and give you time to seek advice. Courts will not grant repossession if lenders have not followed the protocol.
Probate
The legal process of administering someone's estate after they die. Property cannot be sold until the Grant of Probate is issued (unless owned as joint tenants, where it passes automatically). Probate can take 6-12 months, causing delays in property sales and chain complications.
Procuration fee(Procuration Fee (Proc Fee))
The commission a lender pays to a mortgage broker for introducing your business. Typically 0.3-0.4% of the loan amount. This is how fee-free brokers make their money. The fee is paid by the lender and does not come out of your pocket or increase your mortgage rate.
Product transfer(Product Transfer)
Switching to a new rate with your existing lender without moving to a new lender — also called a rate switch. Much quicker and simpler than a full remortgage. No new solicitors, no valuation, no full affordability assessment. The main downside is you are limited to your current lender's product range.
Property survey(Property Survey (Homebuyer / Full Structural))
A detailed inspection of a property's condition carried out by a RICS surveyor for the buyer's benefit — not the lender's. RICS Level 2 (Homebuyer Survey) covers condition and flag issues. RICS Level 3 (Full Structural Survey) is a more thorough investigation. Always recommended — especially for older or unusual properties.
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RAAC(Reinforced Autoclaved Aerated Concrete)
A lightweight form of concrete used in flat roofs, floors, and walls in buildings constructed from the 1950s to 1990s. RAAC can be structurally unstable and prone to sudden collapse as it ages. Its presence became a major public issue in schools in 2023. Properties with RAAC are very difficult to mortgage without specialist lenders.
Redemption statement(Redemption Statement)
A document from your mortgage lender showing the exact amount required to pay off your mortgage on a specific date, including the outstanding capital, any interest due, any admin fees, and any early repayment charge. Required when selling, remortgaging, or paying off your mortgage early.
Reinstatement value(Reinstatement Value)
The cost of rebuilding your property from scratch — as opposed to its market value. Buildings insurance should be based on the reinstatement value, not what you paid or what the property is worth. Getting this wrong means you could be under-insured. A RICS surveyor can provide a reinstatement valuation.
Remortgage
Switching your mortgage to a new deal, either with your existing lender (a product transfer) or a new lender. Most people remortgage when their initial fixed or tracker rate ends to avoid reverting to their lender's higher SVR. You can also remortgage to release equity or borrow more.
Rental income(Rental Income)
Income from existing rental properties used in mortgage affordability calculations. Most lenders use 70-75% of rental income after deducting a notional allowance for voids and costs. Some lenders require the rental income to be declared on your tax return before they will accept it.
Repayment mortgage(Repayment Mortgage)
The standard mortgage type where your monthly payments cover both the interest and some of the capital, so you gradually pay off the loan over the term. At the end of the term, you own the property outright. Contrasts with interest-only mortgages where the capital remains outstanding throughout.
Repossession
When a lender takes legal ownership of your property because you have failed to keep up with mortgage payments. This is a last resort — lenders must follow a strict process including giving you opportunities to catch up. A repossession stays on your credit file for 6 years and is one of the most serious adverse credit events.
Restrictive covenant(Restrictive Covenant)
A legal obligation in a property's title deeds that restricts what you can do with the land — for example, not building an extension, not running a business from the property, or not keeping livestock. Old covenants can be forgotten but still enforceable. Indemnity insurance may be available if the covenant is historic and unlikely to be enforced.
RICS(Royal Institution of Chartered Surveyors)
The professional body for surveyors in the UK. RICS-accredited surveyors carry out mortgage valuations, homebuyer surveys, and full structural surveys. Look for the RICS logo when choosing a surveyor. Their consumer website is ricsfirms.com.
Right to Acquire
A scheme allowing housing association tenants to buy their home at a discount, similar to Right to Buy but with lower discounts (GBP 9,000-16,000). Eligibility depends on how long you have been a public sector tenant and where you live. Not all housing association properties qualify.
Right to Buy
A government scheme giving eligible council tenants the right to buy their home at a significant discount — up to GBP 102,400 in London (GBP 87,200 elsewhere). The discount can be used as the deposit for a mortgage. If you sell within 5 years, you must repay a portion of the discount.
Right to Manage(Right to Manage (RTM))
A right for leaseholders in a qualifying block of flats to take over the management of the building from the freeholder, without having to prove mismanagement. Requires the support of at least 50% of qualifying tenants. Allows leaseholders to appoint their own managing agent and control service charges.
RIO(Retirement Interest-Only Mortgage)
A mortgage for borrowers in or approaching retirement where you only pay the interest each month — the capital is repaid when you die, move into care, or sell the property. Introduced in 2018 as an alternative to equity release. Some lenders have no upper age limit.
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SA302(SA302 Tax Calculation)
An HMRC document showing your income and tax paid for a specific tax year. Essential for self-employed mortgage applicants — most lenders require SA302s for the last 2-3 years. Download from your HMRC online account or request from your accountant.
Sale and rent back(Sale and Rent Back)
An arrangement where you sell your home to a company or investor and then rent it back from them. Now regulated by the FCA after widespread mis-selling. Sellers typically receive significantly below market value and it is only a last resort for homeowners facing imminent repossession.
Satisfied default(Satisfied Default)
A default that has been paid off in full, marked on your credit file as satisfied. Satisfied defaults are viewed more favourably than unsatisfied ones by mortgage lenders but still remain on your file for 6 years. The date of registration (not the date of satisfaction) determines when it drops off.
SDLT higher rates(SDLT Additional Dwellings Surcharge)
A 3% surcharge on Stamp Duty Land Tax (or 5% from October 2024) payable when buying an additional residential property — including buy-to-let, second homes, and holiday lets. Applies to the full purchase price. A refund may be available if you sell your previous main home within 3 years.
Second charge(Second Charge Mortgage)
An additional loan secured against your property, sitting behind your main mortgage. If the property is sold, the first charge (main mortgage) is paid off first, then the second charge. Interest rates are higher than first charge mortgages. Sometimes used to raise capital without disturbing a favourable existing mortgage rate.
Section 21(Section 21 Notice)
A notice that a landlord in England can serve to end an assured shorthold tenancy without giving a reason, sometimes called a no-fault eviction notice. Currently requires 2 months notice. The Renters Reform Bill proposes to abolish Section 21 notices entirely.
Section 36(Section 36 (Administration of Justice Act 1970))
A law that allows courts to adjourn or suspend a repossession order where a borrower is likely to be able to pay their arrears within a reasonable time. This is one of the most important protections for homeowners in arrears — courts regularly use Section 36 to give borrowers time to get back on track.
Section 42(Section 42 Notice (Lease Extension))
A formal notice served by a leaseholder on the freeholder to initiate a statutory lease extension under the Leasehold Reform, Housing and Urban Development Act 1993. Starts a legal process with defined timescales. Requires 2 years of ownership before you can serve one.
Section 8(Section 8 Notice)
A notice served by a landlord to end a tenancy on specific grounds set out in the Housing Act 1988, such as rent arrears or anti-social behaviour. Unlike Section 21, the landlord must prove the grounds at court. Often used alongside Section 21 as a backup.
Self-build(Self-Build Mortgage)
A specialist mortgage for people building their own home from scratch. Funds are released in stages as construction progresses. Rates are higher than standard mortgages. Once the build is complete, you usually remortgage onto a standard residential product.
Self-employed mortgage(Self-Employed Mortgage)
Getting a mortgage when your income comes from self-employment, freelancing, or running your own company. Lenders typically require 2-3 years of accounts or SA302 documents. Specialist lenders may accept 1 year of accounts. Income is usually assessed as net profit for sole traders or salary plus dividends for limited company directors.
Service charge(Service Charge (Leasehold))
A payment made by leaseholders to the freeholder or managing agent for the upkeep, management, and insurance of the building and common areas. Service charges can vary significantly year to year and can be disputed through the First-tier Tribunal. High or unpredictable service charges make flats harder to sell.
Shared ownership(Shared Ownership)
A government-backed scheme where you buy a share of a property (typically 25-75%) and pay rent on the remainder to a housing association. You can buy additional shares over time (staircasing) until you own it outright. Mortgage options are more limited than for full ownership, as not all lenders offer shared ownership products.
Short lease(Short Lease)
A leasehold property where the remaining lease term is less than 70-80 years (thresholds vary by lender). Most lenders will not offer mortgages on short leases without requiring a lease extension first or on completion. The shorter the lease, the fewer lenders will consider it, and the harder it becomes to sell.
Shortfall debt(Shortfall Debt (Repossession))
The remaining debt after a lender sells your repossessed property for less than the outstanding mortgage balance. Lenders have 12 years to pursue a shortfall debt in England and Wales. The debt stays on your credit file and can affect future mortgage applications even after you have rebuilt your credit.
SMI(Support for Mortgage Interest)
A government loan for homeowners who are on certain benefits, which pays the interest on their mortgage. Unlike the old scheme, it is a loan secured against your property that must be repaid (with interest) when you sell or transfer ownership. Prevents repossession for eligible borrowers who cannot meet interest payments.
Soft search(Soft Credit Search)
A credit check that does not leave a visible mark on your credit file, so other lenders cannot see it happened. Used by lenders for eligibility checks, AIP decisions, and identity verification. Checking your own credit file is also a soft search. Soft searches do not affect your credit score.
Solar panels(Solar Panels)
Photovoltaic panels installed on a roof to generate electricity. Usually straightforward for mortgages when owned outright. Problems arise with lease agreements where a third party owns the panels and has a licence on the roof — this can complicate lending and selling.
Solicitor(Property Solicitor)
A qualified legal professional who can act in property transactions, regulated by the Solicitors Regulation Authority (SRA). Solicitors handle conveyancing, contract review, title searches, and mortgage legal work. All solicitor-run conveyancing firms must be on each lender's approved panel to act in mortgage transactions.
Specialist lender(Specialist Mortgage Lender)
A mortgage lender that focuses on borrowers or properties outside mainstream criteria — such as those with adverse credit, complex income, or non-standard construction. Also known as adverse lenders or sub-prime lenders. Usually accessed through whole-of-market brokers rather than directly.
Springboard mortgage(Springboard Mortgage)
A type of mortgage where a family member deposits savings into a linked account held by the lender as security for the borrower. The family member earns interest on their savings and gets the money back after a set period (usually 3-5 years), provided payments are made on time. Allows higher LTV borrowing without a gifted deposit.
SRA(Solicitors Regulation Authority)
The independent regulator for solicitors in England and Wales. If your solicitor behaves improperly in a property transaction, you can report them to the SRA. Solicitors must be SRA-regulated to act in mortgage transactions. Check any solicitor at sra.org.uk.
Staircasing(Staircasing (Shared Ownership))
The process of buying additional shares in a shared ownership property, increasing the percentage you own. You can staircase in steps (usually 10% or more) until you own 100%. Each step requires a new valuation and may need a new mortgage application. Remortgage options may be available.
Stamp duty(Stamp Duty Land Tax (SDLT))
A tax paid to HMRC when you buy a property in England or Northern Ireland above a certain price threshold. First-time buyers pay no stamp duty on the first GBP 425,000. A 3% surcharge applies on additional properties. Scotland and Wales have their own equivalents (LBTT and LTT respectively).
Standard security(Standard Security (Scotland))
The Scottish equivalent of a mortgage charge on property. Under the Conveyancing and Feudal Reform (Scotland) Act 1970, lenders take a standard security over the property as collateral. The legal framework differs from English mortgages but the practical effect is the same.
Stress test(Mortgage Stress Test)
An affordability check that tests whether you could still afford your mortgage payments if interest rates were to rise significantly (typically 3% above the initial rate). Introduced after the Mortgage Market Review 2014. The Bank of England withdrew the mandatory stress test in 2022, but many lenders continue to use their own versions.
Structural survey(Full Structural Survey (RICS Level 3))
The most comprehensive property inspection available, covering structure, roof, damp, drainage, electrics, and heating. Recommended for older, unusual, or visibly problematic properties. More expensive than a Homebuyer Report (typically GBP 500-1,500) but can save thousands by revealing hidden problems before you commit.
Subsidence
The downward movement of the ground beneath a building, causing it to sink and crack. Caused by shrinking clay soils, tree root damage, underground water, or mining activity. Buildings with a history of subsidence are difficult to insure and mortgage. Evidence of successful underpinning and monitoring can help.
SVR(Standard Variable Rate)
The lender's default interest rate that you move to when your initial fixed or tracker deal ends. Typically 1-3% higher than the best available deals. There is usually no early repayment charge on SVR, so you can leave at any time, but most people remortgage before reaching SVR to avoid the higher rate.
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TA6 form(TA6 Property Information Form)
A standard form that sellers must complete disclosing information about the property — including disputes, notices, alterations, planning history, and Japanese knotweed. Part of the conveyancing process. False answers can lead to a misrepresentation claim after completion.
Thatched roof(Thatched Roof Property)
A property with a roof made from natural straw or reeds. Fewer mortgage lenders will consider thatched properties due to higher fire risk and significantly higher reinstatement costs. Buildings insurance is expensive and some insurers will not cover them. Specialist lenders and insurers do exist for this property type.
Timber frame(Timber Frame Construction)
A method of building using a timber structural frame rather than traditional masonry. Modern timber frame is generally acceptable to mainstream lenders. Older timber frame or certain prefabricated timber systems (such as Reema, Wates, or Airey) are classified as non-standard construction and attract fewer lenders.
Title defect(Title Defect)
A problem with the legal ownership records of a property that casts doubt on the seller's right to sell. Examples include missing deeds, unresolved boundary disputes, adverse possession claims, or undisclosed covenants. Title defects can prevent or delay mortgage approvals and may require indemnity insurance or legal action to resolve.
TPO(The Property Ombudsman)
An independent scheme for resolving disputes between consumers and property agents (estate agents, letting agents). All estate agents and letting agents in the UK must be a member of an approved redress scheme — TPO is the largest. Free for consumers to use after the agent's own complaints process is exhausted.
Tracker rate(Tracker Rate Mortgage)
A mortgage with an interest rate that moves directly in line with the Bank of England base rate, set at a fixed margin above (or occasionally below) it. For example, base rate plus 1% means if the base rate is 4.5%, you pay 5.5%. Your payments go up and down as the base rate changes, with no cap unless specified.
Transfer of equity(Transfer of Equity)
The legal process of adding or removing someone from the ownership of a property. Common in divorce, when a couple separates, or when a parent wants to add a child to the deeds. Requires the mortgage lender's consent and a new affordability assessment for the remaining or new parties.
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Underpinning
A structural engineering process used to stabilise or strengthen the foundations of a building that has subsided. A property that has been underpinned is not unmortgageable, but it will have fewer lenders willing to consider it. A structural engineer's report and monitoring evidence are usually required.
Underwriting(Mortgage Underwriting)
The process a lender uses to assess a mortgage application in detail — checking credit history, income evidence, affordability calculations, and the property valuation. An underwriter makes the final lending decision. Complex cases are assessed manually rather than by automated systems.
Universal Credit
A government benefit that replaced several legacy benefits including Tax Credits, Housing Benefit, and ESA. Paid to people on low incomes or who are out of work. Some mortgage lenders accept Universal Credit as income, but the benefit cap and unpredictability of self-employed UC can complicate affordability assessments.
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Valuation(Mortgage Valuation)
A basic assessment of a property's value carried out for the lender to confirm the property is adequate security for the mortgage. This is not the same as a homebuyer's survey — it is a brief check for the lender's benefit, not yours. Some lenders offer free valuations, while others charge GBP 200-1,500 depending on the property value.
Visa mortgage(Visa Holder Mortgage)
A mortgage for someone who is not a UK or EU citizen and is living in the UK on a visa. Most mainstream lenders require at least 2 years in the UK and at least 2 years remaining on your visa. Deposit requirements are often higher and specialist lenders may be more flexible on visa type.
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Whole-of-market broker(Whole-of-Market Mortgage Broker)
A mortgage broker who searches across all available lenders — rather than being tied to a panel of preferred lenders. Important for borrowers with complex situations like adverse credit, unusual income, or non-standard property, where the best deal may come from a specialist lender not available on restricted panels.
Woodworm(Woodworm (Timber Beetle Infestation))
Damage to timber caused by wood-boring beetle larvae. Common in older properties, especially in roof timbers, floorboards, and furniture. Active woodworm requires treatment, but treated and monitored woodworm is generally not a barrier to getting a mortgage. A surveyor's report on its severity and treatment status is key.
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Zero hours contract(Zero Hours Contract)
An employment arrangement where the employer is not obliged to provide a minimum number of hours, and the employee is not obliged to accept work offered. Many lenders are cautious about zero hours contract income, but consistent earnings over 12+ months with strong bank statements can satisfy specialist lenders.