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Jigsaw puzzel
Posted: 25th May 2017

Mortgages can be confusing. Take a look at our handy glossary of key terms to help you cut through the jargon. For more information on our fees and what they mean, please see our Tariff of Charges.

Additional Borrowing

This is when you already have en existing mortgage with us and you want to borrow more - for example, for debt consolidation or home improvements.

Buy to Let (BTL)

This is when you own a property (either outright or with a mortgage) that you are letting out to tenants.

Early Repayment Charge (ERC)

This is a charge payable if you exceed the overpayment terms on your mortgage package. You can overpay up to 50% on most of our mortgage packages before an Early Repayment Charge becomes payable.

European Standardised Information Sheet (ESIS)

If you apply for a mortgage with us and are successful in your application, you will receive this document outlining the key features and terms of your mortgage offer. This replaced the Key Facts Illustration as part of the implementation of the European Mortgage Credit Directive in 2015.

Key Facts Illustration (KFI)

This was the document presented to successful mortgage applicants outlining the key features and terms the mortgage offer prior to 2016. This was replaced with the European Standardised Information Sheet as part of the implementation of the European Mortgage Credit Directive.

Loan to Value (LTV)

The amount of deposit put down on a property compared to the cost of the property. For example, for a mortgage application where the value of the property is £200,000 and the applicant had a deposit of £20,000, the Loan to Value would be 90%. This is used to determine what products you may eligible for - generally, a higher Loan to Value carries a lower rate of interest.

Mortgage Credit Directive (MCD)

This is a European Union Directive implemented on 21 March 2016, introducing new rules governing the UK mortgage market. For more information on MCD and how it affected the market, take a look at our FAQs.

Mortgage Market Review (MMR)

The Mortgage Market Review was implemented on 26 April 2014 and brought in reforms to the UK mortgage market that tightened affordability criteria for many new and existing borrowers.

Representative Example

A representative example is now supplied alongside all mortgage products as part of MCD. This is a purely representative set of figures based on the market average and will differ from your individual circumstances. It shows the representative APRC and a breakdown of monthly payments based on the mortgage product you have selected, alongside the amount of interest payable and the total overall amount payable to the lender.

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