When it comes to mortgages, it can often feel like everyone’s speaking another language. With our handy mortgage glossary, we cut through the jargon and explain all the ‘need to know’ words and phrases that you’re likely to hear when going through your mortgage application.

Agreement in Principle (AIP)

Also known as a Decision in Principle (DIP), this is a certificate from the lender to say that they agree to lend you a certain amount of money, based on information you’ve shared with them.

APRC (Annual percentage rate of charge)

APRC is a standard calculation in the mortgage industry and allows mortgages from all lenders to be compared. It is the true cost of the mortgage over the full term set out as a yearly rate, including all fees, terms and interest.

The calculation assumes that you maintain the mortgage for the full term (i.e 25 years).

Arrangement fee

It’s very likely you’ll be charged an arrangement fee when taking out a mortgage, however our advisers will be able to talk you through the conditions that apply.

Bank of England Bank Rate

The rate set by the Bank of England, which is reflected in the interest rates charges by lenders.

Building Survey

An extensive survey, carried out by a qualified surveyor, to spot faults and potential problems in the property you’re buying.


The amount you have borrowed on the mortgage, on which interest will be charged.


When you become the legal owner of the property.


The legal work involved in selling and buying property.


The fees, such as Stamp Duty, Land and Buildings Transaction Tax (Scotland) and land registry fees which you pay to the conveyancer or solicitor.

Early repayment charge

The charge some lenders make if a mortgage is paid off early.


The total value of your property, less the amount of the mortgage and any other secured loans you have.

European Standardised Information Sheet (ESIS)

The pre-contractual disclosure document which details your mortgage.

Exchange of contracts

The point where the property sale becomes legally binding.

External inspection valuation

This is a very simple valuation where the surveyor will estimate the value of the property by viewing it from the road.


A guarantor can guarantee the mortgage repayments for you if the lender determines you are at high risk of not making the payments.

Home buyer survey

A detailed valuation that contains a report on the condition of the property, highlighting defects.

Home Report (Scotland)

This is instructed by the seller and includes three documents: a Single Survey, an Energy Report and a Property Questionnaire. The report usually includes a mortgage valuation. In the circumstance this is not the case, the lender will request that a valuation report is carried out.

Initial Disclosure Document (IDD)

A document which explains the level of services to be provided.


The money you are charged for borrowing.

Land registry fee

A fee paid to the land registry to register ownership of a property.

Land Building Transaction Tax (Scotland)

When you buy a property you may need to pay LBTT. LBTT is a tax applied to residential and commercial land and buildings transactions (including commercial purchases and commercial leases) where a chargeable interest is acquired. This replaced UK Stamp Duty Land Tax (SDLT) in Scotland from 1st April 2015.


A legal contract which gives the ownership of a leasehold property to the buyer for a fixed period of time.

Mortgage application fee

Fees charged by the lender to organise the mortgage for you. These are not usually refunded if you do not go ahead with the mortgage. Some lenders will only charge such feed for specific mortgage deals.

Mortgage deed

The legal agreement which gives the lender a legal right to the property.


A statement of affordability, which gives an indication to lenders of how much you can borrow. This Mortgage-in-Principle (MIP) is a statement you can present to estate agents and other vendors to show that you're a serious buyer that, in theory, can get a mortgage  

Mortgage term

The length of term over which the mortgage will be repaid.

Offer of advance

The formal offer of a mortgage from a lender.

Stamp Duty

When you buy a property it is likely you will need to pay Stamp Duty. The amount you pay will vary depending on the purchase price of the property and could be anything between 2% and 15% of the purchase price.

Your adviser can provide you with general information on the rates payable. However, if you need advice on any tax implications, then you should speak to an independent tax and legal specialist as mortgage advisers are not qualified to give tax advice.


Paying off a mortgage.

Structural survey

This is a detailed report that can include tests on drains and utilities. It would be very useful if you’re thinking about building an extension, for example. In Scotland, this can be requested by the lender if an area of concern is highlighted in the home report.

Subject to survey or contract

Wording included in any agreement before the exchange of contracts. This wording allows the seller or buyer to withdraw from the property sale.

Title deeds

The legal documents which set out the ownership of a property.


This is the mortgage lender’s inspection of the property to assess its suitability for a mortgage.


If you have any questions about buying for the first time, or perhaps just the mortgage process in general, please feel free to get in touch with our friendly mortgage team who can put you in touch with an adviser local to you. 

Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.