Glossary

100% Re-mortgage: A 100% mortgage is where a deposit is not paid.

Adverse Credit Re-mortgage: An adverse credit mortgage (sometimes know as a sub-prime mortgage) is a loan given to those with poor credit. Usually the borrower would have credit issues such as CCJs (County Court Judgements due to non payments of outstanding debt), an IVA (individual voluntary arrangement that allows an individual to avoid bankruptcy and make maximum possible restitution to creditors), arrears (payments that have not been made by the due date), defaults (failure to meet the terms of a loan by not paying the interest or capital due), bankruptcy or repossession problems.

Buy-to-Let Re-mortgage: Re-mortgages are sometimes used to raise the deposit for a buy-to-let mortgage for property that the borrower lets to other tenants.

Capped Rate Re-mortgage: A capped rate re-mortgage is a mortgage that is guaranteed not to rise above a specific rate within a set period.

Cashback Re-mortgage: A cashback re-mortgage is a mortgage where the lender refunds a sum of money. This cash is either a flat figure or as a percentage of the loan. The refund is on completion.

Current Account Re-mortgage: A current account re-mortgage is a flexible mortgage that is combined with a current account. The current account balance is automatically set against the mortgage balance. The interest is only charged on any outstanding amount. This means that interest payments are reduced.

Debt Consolidation Re-mortgage: A debt consolidation re-mortgage combines existing debts you may have. For instance your present mortgage, bank loans, credit cards, HP, bank could be combined by means of a re-mortgage.

Direct Re-mortgage: A direct re-mortgage is often the term used to describe a mortgage arranged by a lender over the phone.

Equity Release Re-mortgage: Equity release is designed to allow homeowners to release cash from their property. They are sometimes called home income plans or home reversion schemes. You can choose to receive the equity as a lump sum, as income or as a mixture of both.

Fixed Rate Re-mortgage: A fixed rate re-mortgage is a mortgage that is charged at a fixed rate within a set period and can cover periods up to 40 years.

Flexible Re-mortgage: Flexible re-mortgages can mean a variety of things including varying your monthly repayments such as overpaying, underpaying or taking payment holidays. A flexible mortgage could allow you to pay off your mortgage early.

Let to Buy Re-mortgage: A let to buy re-mortgage is a mortgage where the borrower's current property is let out and the resulting rental income is used to cover the mortgage repayments on a new property that the borrower uses as a main residence.

Discounted Rate Re-mortgage: A discounted rate re-mortgage is a variable mortgage that is discounted from a Lender's Standard Variable Rate by a set percentage within a set period.

Interest Only Mortgages: With an interest only re-mortgage the initial loan amount remains constant throughout the term of the loan. The monthly mortgage repayments only pay off the interest being charged on this amount. Interest only mortgages are tied to investments such as ISAs, endowment policies and personal pensions which are designed (not guaranteed) to cover the initial loan amount at the end of the loan term.

Lifetime Re-mortgage: A lifetime re-mortgage (sometimes referred to as a retirement mortgage) is a form of equity release that is often used by people over the age of 60. There are no monthly repayments to be made - interest is rolled up and, when your home is sold (usually on your death), the full amount is paid off. You always retain ownership of the property until it is sold as long as you live in it.

Offset Re-mortgage: This is a flexible re-mortgage which allows a borrower to keep their mortgage debt, savings account and current account balances in separate accounts. However, all balances are aggregated for the purposes of interest calculation. As the other balances are taking into consideration, interest is only charged on any outstanding amount. This means that interest payments are reduced.

Payment Holiday Re-mortgage: A payment holiday is a period in which the borrower does not make the usual mortgage payments. It is usually available with a flexible mortgage and will only be available where overpayments have previously been made.

Portable Re-mortgage: A portable re-mortgage is where the terms and conditions of a mortgage product can be transferred without penalty to a new property.

Repayment Re-mortgage: A repayment re-mortgage is where you repay your loan and interest charged in monthly instalments. Your loan is repaid in its entirely over the full term agreed.

Retention Re-mortgage: A retention re-mortgage is when the lender holds back some of the loan until stipulated repairs have been carried to the property. The amount is known as retention.

Second Mortgage: A second mortgage is also known as a secured loan. It is an additional mortgage taken out on a property which is already mortgaged.

Self-Certification Re-mortgage: Do you have a problem proving your income? Self-certification re-mortgages (range includes fixed rates, flexible and discount) allow borrowers to state their own income instead of offering payslips or accounts.

Standard Variable Rate: Standard variable rate is a variable rate that the lender determines at their own discretion.

Tracker Remortgage: A tracker re-mortgage is a variable mortgage that is either above or below the Bank of England's base rate by a set percentage within a set period, i.e. it has an interest rate that follows the Bank of England’s Base Rate. Your monthly mortgage interest payments go up when the base rate goes up and go down when the base rate goes down.