APR – Annual Percentage Rate. This is a measure to compare interest rates because it takes into account the upfront costs of setting up a mortgage.

arrangement fee – A fee you pay in return for a mortgage deal such as a fixed or capped rate mortgage.

base rate – The rate of interest set by the Bank of England. Lenders may describe their own standard variable rate as a base or basic rate.

capital and interest mortgage – Can be called as a repayment mortgage, your monthly mortgage repayments are used partly to pay the interest on the amount you borrowed and partly to repay the outstanding mortgage.

capped rate - This is an interest rate charged for a set period of months or years, which can go up or down with the variable rate, but there is a maximum (capped) interest rate, above which it cannot go.

completion – The time when contracts have been exchanged, monies have been paid and received and the keys are handed over.

conveyancing - The word used by solicitors to describe the legal services involved in buying and selling a property.

deposit – The amount of money you put towards buying a property.  Most mortgage companies require a 5% deposit although there are specialist providers offering 100% mortgages i.e. 0% deposit.

deed – A formal legal document, usually held by your mortgage provider, which is signed and delivered.

equity – The amount of value in a property that isn’t covered by a mortgage, i.e. the difference between you outstanding mortgage and the current value of your home.

exchanging – The buyer and seller exchange contracts, usually via solicitors, as well as a deposit. At this point both parties are committed to the sale.

fixed rate – Basically, the mortgage payment is set or ‘fixed’ for an agreed period of months or years, i.e. you mortgage payment will not change as interest rates move up or down. 

gazumping – When a potential buyer is outbid by a rival buyer, losing both the property and any money spent on the conveyancing process.

interest-only mortgage – Your monthly payments to your lender are simply made up of interest. You do not pay off any of the mortgage during the term of the mortgage. You pay off the mortgage finally by using the proceeds of a separate investment plan, for example, PEP, ISA, Endowment, etc.

interest rates - The charge levied by a lender for money borrowed over a fixed amount of time.

Land Registry fee – The charge payable to the Land Registry to record the purchase or remortgage of your home.

loan to value - Compares the payment price with the value of the property. This is expressed as a percentage.  Often mortgage companies will offer differing mortgage deals dependent on loan to value, i.e. if you want to borrow £95,000 on a home valued at £100,000 you would look for a mortgage rate with a loan to value rate of 95% i.e. the remainder 5% would be your deposit.

Mortgage indemnity guarantee – A one-off charge paid by borrowers taking out high loan-to-value mortgages – usually 70% and above. The MIG protects the lender against losses caused by arrears although the borrower actually pays the premium.  It is important to check whether your mortgage provider requires a MIG.

mortgage – A loan to buy a home where you put up the property as security for the loan.

mortgage deed - The document that sets out the amount and terms of the mortgage. This is kept by the mortgage company.

searches – Local research helps protect the buyer from unwelcome surprises when they move in.

stamp duty – Government tax on the purchase price of a property which currently stands at: 1% between £60,001 and £250,000 3% between £250,001 and £500,000 4% on £500,001 and above.  These rates are subject to change by the government.   Certain disadvantaged areas in Liverpool are exempt from Stamp Duty on house purchases under £150,000.  (A full list of exempt areas is available at http://www.inlandrevenue.gov.uk/so/england.pdf)

term – The period of years over which you take the mortgage and when you have to repay it.  A first time buyer will often have a 25 year mortgage.

title deeds – The document that shows who owns the property. This is usually kept by the owner’s solicitor.

valuation report - Survey carried out by the mortgage lender to ensure the property is a sound investment, and is not overpriced.

variable rate mortgage – The interest rate the lender charges can go up or down, with your mortgage repayments changing accordingly.  Variable mortgages often fluctuate according to changes in the Bank of England Base rate, i.e. in most cases if the Banks of England increase interest rates by 1% then your mortgage repayments would also increase by an equivalent amount.