Arrangement fee
A fee you pay your lender in return for providing you with a mortgage. Usually applies to fixed-rate, discount or cash-back mortgages.

Bridging loan
A short-term loan to facilitate the purchase of one property prior to the sale of another. Professional advice should be taken before considering any bridging finance.

Buy-to-let mortgage
A mortgage designed for people who wish to buy a property to let to others. The ability to repay this type of mortgage is often based on the projected rental income from the property as opposed to the personal income of the borrowers.

Capped rate
An interest rate charged on a mortgage where the lender guarantees that the rate will not exceed a certain amount, usually for a set period of 1-5 years, but which will reduce if the standard variable rate falls below the capped rate.

Cashback mortgage
A payment you get on taking out a mortgage. It may be a fixed amount or a percentage of the amount of the mortgage.

Discount rate
An interest rate at a set margin below the standard variable rate, usually for a period of 1-5 years. Used as an incentive to attract new borrowers.

Equity
The amount of value in a property that isn’t covered by a mortgage.

Equity release
You take a new, larger mortgage, or increase the mortgage you already have to raise extra money for personal use.

Exchange of contracts
When buyer and vendor sign and swap identical contracts showing the price, which fixtures and fittings are being sold and the date of completion. On exchange the sale becomes legally binding, and if any party pulls out before completion they must pay compensation.

Fixed-rate mortgages
What you pay each month is fixed for a fixed period. Again, research is the way to seek out the best deal.

Fixtures & fittings
Any item that is attached to a property and so legally is part of the property.

Foreign currency mortgage
A way of exploiting the lower borrowing rates offered in other countries. You need to be sure that the value of the currency is stable.

Freehold / Leasehold
Freehold means you own the property. Leasehold means you own the right to occupy it for a number of years.

Homebuyers’ report
A multi-page property report which lies between a mortgage valuation and a full survey.

Interest-only mortgage
Borrower is only required to pay interest on the amount borrowed during the mortgage term but must ensure that enough funds will exist (through an investment policy or other means) to repay the mortgage at the end of the term.

Low-start mortgage
You pay a reduced amount for a fixed period at the start of the mortgage, after which your repayment will rise and is likely to be greater than with ordinary repayment loans.