First-time buyer jargon buster

 Young adults moving in new home

 Don’t know your arrangement fees from your equity? Our first-time buyer jargon buster is here to help you navigate the property buying process.

There’s a lot of jargon associated with buying a house.

If you don’t know your arrangement fees from your equity, this guide is for you.


Key concepts

Deposit: payment made on exchange of contracts; a percentage value of the house, not part of the mortgage.

Equity: the value of the home minus outstanding mortgage repayments; the amount you own.

Loan to Value (LTV): the ratio of money borrowed to value of the property; a lower LTV ratio means better mortgage deals.

Mortgage: loan taken to cover the cost of the house minus your deposit. Repayments made over an agreed term, at agreed interest rates.


Types of mortgage

Guarantor mortgage: an arrangement where someone close to the borrower (the guarantor) takes responsibility for some cost and risk of the property.

Property as security: the guarantor’s home is used as mortgage collateral.

Savings as security: a cash lump sum is used.

Joint mortgage: an arrangement where 2+ people take out a mortgage together.

Rates: the amount of interest you pay, calculated as a percentage of the mortgage amount.

Capped rate: interest varies but may not increase beyond an agreed amount.

Discount rate: interest is reduced for an agreed period.

Fixed rate: interest stays the same for the duration of the mortgage.

Variable rate: interest changes during the mortgage.

Self-certification mortgage: now-defunct type of mortgage where the borrower stated they could afford to pay, rather than proving it with documentation.

 New Call-to-action


Types of ownership

Commonhold: a group of people form a company and take joint ownership of a building.

Freehold: you own the property and its land in perpetuity.

Joint tenancy: multiple owners, each legally considered single owners with equal rights in the equity and ownership.

Leasehold: you own the property and its land for the term outlined in a lease agreement. At the lease end, ownership reverts to the freeholder.

Tenants in common: multiple owners sharing equity and ownership, but not necessarily equally.



Arrangement / booking / completion fee: an administrative charge from the lender for arranging your mortgage.:

Broker fee: payment for your mortgage broker’s services.

Estate agent fee: percentage commission of the property value, taken on completion.

Legal fee: payment for your conveyancer’s services.

Local authority search fee: payment to determine whether there are restrictions on the property (listed, under compulsory purchase order, etc).

Mortgage account fee: payment covering lender’s admin costs.

Stamp duty: percentage fee charged on properties over £125,000.

Telegraphic transfer fee / CHAPS: payment covering lender’s transfer to conveyancer.

Valuation and survey fee: payment for valuation of the property.



Help-to-buy: government scheme to help first-time buyers more into a new-build property.

Right-to-acquire: help for housing association tenants who have had a public sector landlord for 3 years to buy their home.

Right-to-buy: similar to right-to-acquire but for council house tenants.

More info can be found in our guide to government schemes.



Certificate in Mortgage Advice & Practice (CeMAP): qualification allowing mortgage brokers to advertise themselves as licensed.

Deed of trust: outlines distribution of equity between tenants in common.

Key Facts Illustration (KFI): provides information about a particular mortgage, tailored to your terms.

Agreement in principle: indication of interest in moving ahead with a deal outlined in a KFI.

SA302: evidence of earnings document, useful for self-employed people looking for a mortgage.


People and organisations

Conveyancer (solicitor): legal professional trained in buying and selling property.

Financial Conduct Authority (FCA): regulatory body ensuring best practice from mortgage brokers.

Financial Ombudsman: from their site, “The UK's official expert in sorting out problems with banks, insurance, PPI, loans, mortgages, pensions and other money and financial complaints”.

Financial Services Compensation Scheme (FSCS): body to protect and compensate consumers “when authorised financial services firms fail”.

HM Land Registry: from Wikipedia: an organisation who “register the ownership of land and property in England and Wales”.

London Institute of Banking & Finance: an educational charity who issue CeMAPs.

Mortgage broker (or advisor): a qualified industry expert who acts as an intermediary between you and lenders.

Need anything else defined? Get in touch!

New Call-to-action