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Mortgages glossary
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D-G
Daily interest
The interest charged takes into account any changes in the mortgage balance from day to day. Any payment you make will reduce the balance and therefore the amount of interest you are charged, from the day that we receive it.
Deposit
We’ll only lend you a certain percentage of either the purchase price or the property valuation, whichever is lower. So you'll need to use some of your own money to buy the property – a deposit.
Disbursements
All the various costs payable to other people or bodies (for example search fees) are itemised on your conveyancers invoice for carrying out your home buying legal work.
Discharge Fee
You have to pay this to some lenders for releasing their hold over a property once you have paid off your loan.
Early Repayment Charge (ERC)
We offer different types of mortgages with different rates. With some of these there may be a charge if you repay all or part of your mortgage within a certain period of time -we call these early repayment charges (ERC).
Your offer letter gives you details of any ERCs that apply to you.
Making a lump sum overpayment to your mortgage
Making regular overpayments to your mortgage
Energy Efficiency ReportSellers in England and Wales have to provide a report to buyers on the energy efficiency of the property. For more information visit https://www.gov.uk/buy-sell-your-home/energy-performance-certificates
Equity
The difference between the amount you owe on your mortgage and the current value of your property.
Exchange of contracts
The swapping of signed contracts between a buyer's conveyancer and a seller's conveyancer. Once you have exchanged contracts, you are both legally bound to the transaction.
Financial Conduct Authority (FCA)
Regulates the financial services industry in the UK. Their aim is to protect consumers, make sure the industry remains stable and to promote healthy competition between financial services providers.
Fixed rate
Your interest rate is set at a certain level for an agreed period. At the end of that period we switch you to another rate, usually one of our lender variable rates.
First time buyer
A first time buyer or purchaser is someone who is buying a property for the first time. Some lenders offer special deals available only to first time buyers.
Freehold
If the property is freehold, then you own both the property and the land it's built on.
Government Land Tax
This is a government tax charged on land and property transactions in the UK. The tax is charged at different rates depending on the property and value of the transaction. Government Land Tax is known differently depending on which country you are purchasing a property, i.e. in England it is known as Stamp Duty.
Guarantor
A guarantor is someone who guarantees to make your monthly payments if you can't make them yourself. For example, parents may act as guarantors for their children when they buy their first home. We do not offer these types of mortgage.
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H-L
Halifax Homeowner Variable Rate (HHVR)
This is one of our Lender variable rates. We have more than one lender variable rate, and your Mortgage Illustration and offer will tell you which rate(s) applies to you.
Higher Lending Charge
A charge is sometimes made by lenders if your mortgage loan represents a high percentage of the property's value.
Home Report
Sellers in Scotland have to provide a report to buyers on the condition of their property. For more information, visit the Scottish Government website.
Household insurance
A way of referring to both buildings and contents insurance. Also called 'Home Insurance'. Find out more about Halifax Home Insurance.
Illustration
A Mortgage Illustration sets out the terms of the mortgage product and the total cost of the loan.
Interest-only mortgage
Your monthly payment pays only the interest charges on your loan - you don't pay off any of the loan amount. You need to know from the start how you are going to find a lump sum to repay the loan at the end of the mortgage term.
Land Registry Fees
The Land Registry will charge for any searches of the property register. It also charges for registering you as the owner and us as the lender. You must pay both these costs.
Leasehold
If the property is Leasehold, then you own a temporary right to the property and the land it's built on. Leases can last for decades or centuries. There is usually an annual charge for the lease, called a ground rent.
Lender Variable Rate
A variable rate we set. We decide when and how much to raise and reduce these rates. We have more than one Lender Variable Rate, and your Mortgage Illustration and offer letter will tell you which rate(s) applies to you.
These rates are not usually available as a stand-alone product. They are usually a rate we switch you to at the end of your product rate period.
Life Assurance
A form of insurance by which someone's life is insured. Life assurance policies can run parallel with a repayment mortgage, so the mortgage will be repaid if you die before the end of the term.
Loan to value (LTV)
Loan to value is the proportion of the value or price of the property (whichever is the lower), that you borrow on a mortgage. For example, a £90,000 mortgage on a house valued at £100,000 would mean a LTV of 90%.
Local authority search fees
The local authority will charge for answering your conveyancer’s questions about the property you want to buy, such as whether the local authority maintains the roads adjoining the property or whether you'll be responsible for this.
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M-P
Mortgage
A mortgage is something that you give the lender in exchange for the loan that they make to you so that you can buy your property. The mortgage is secured against the property.
Mortgage product
A Mortgage product or Mortgage deal is what we call the type of mortgage interest rate you have, which includes: Whether your rate is fixed or variable, when the rate will end and whether there is a charge for early repayment.
Mortgage account fee
The fee is to cover the setting up, routine maintenance and closing down of the mortgage account.
Mortgage deed
A legal document establishing a mortgage on a property. This is called a standard security in Scotland.
Mortgage term
The length of time over which you agree to pay back your mortgage, up to a maximum of 40 years.
Mortgage calculator
A mortgage calculator could help you work out how much you could borrow, how much it could cost you each month in repayments and could also help you choose which mortgage deal may be suitable for you.
Mortgage offer
A mortgage offer is issued by a lender once your application has been received and necessary checks, such as a valuation and confirmation of your details, have been carried out. It sets out the terms under which the lender is prepared to offer you a loan.
Negative equity
This is when the amount you owe on your mortgage is greater than the value of your property.
Overpayment calculator
Our mortgage overpayment calculator can give you an idea of how overpaying on a mortgage could save you money by reducing the amount of interest charged. Anyone can use this calculator - whether you are an existing mortgage customer with us or you have a mortgage with another lender.
Premium
Amount you pay on a regular basis, usually for an insurance policy.
Product fee
This is charged on some mortgages as part of the deal. It can be paid up-front or added to the total mortgage amount. If you add it to your mortgage, you’ll pay interest on it at the same rate as the rest of your borrowing. It might be a flat fee, or a percentage of the loan amount.
Product transfer
You have a loan with us and you want to transfer part or all of it to a new mortgage product.
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R-Z
Remortgage
You already own a property, you have a loan with another lender and you want to change lender.
Repayment mortgage
Every month, your monthly payments go towards reducing the amount you owe as well as paying off the interest.
Repayment Plan
Before you apply for an interest-only mortgage you will need to make sure that you have a repayment plan in place that will provide enough money to repay everything you owe at the end of the mortgage term. Find out more about repayment methods.
Retention
Holding back part of a mortgage loan until repairs or improvements to the property are satisfactorily completed.
Roll number
A roll number is a reference number that will be given to you when you apply for a mortgage with Halifax. Not sure what the difference between a roll number and an account number is? Find out more here.
Stamp Duty Land Tax/Land and Buildings Transaction Tax
For an updated definition, refer to Government Land Tax in the D-G section.
Structural engineer's report
A specialist report from a structural engineer on the condition of a property. These can be requested after the initial valuation when the valuer is concerned about the condition of the property.
Sub-accounts
Your mortgage may be made up of different repayment methods with different interest rates over different mortgage terms. If so, your mortgage will be split into multiple parts called sub-accounts.
Most of our customers will have a sub-account 01 that is their main mortgage and a sub-account 99 which holds any fees. Some customers may also have a sub-account 98 if they have a mortgage account fee.Tracker rate
This is a variable rate loan with an interest rate that is above, below or the same as the Bank of England bank rate or some other rate it tracks for an agreed period. At the end of that period, you'll switch to another rate, usually one of our lender variable rates.
Valuation
A valuation is an inspection of the property to work out if it is acceptable to the lender as security for your mortgage.
When you apply for a new mortgage, we’ll ask you to choose from two levels of inspection and report. A Mortgage Valuation (level 1) is a basic property valuation purely for us to make a decision on whether we'll lend money to buy the property. A Survey and Valuation report (level 2) is a survey for you, detailing the essential things you need to know about the property.
You can also choose to have a Building Survey completed on the property. This is the more detailed, customised report. We do not offer these and will not be able to recommend a surveyor to complete the work on your behalf. Because you need to get this yourself we won't receive any information from your chosen surveyor and we'll still need to complete a separate Mortgage Valuation so we can assess your application.
A-C
Additional Borrowing
You have a mortgage with us and want to borrow more money. We call this additional borrowing.
Advance
A mortgage loan.
Agreement in Principle
An Agreement in Principle (sometimes this is called a Mortgage Promise) tells you if you can have a mortgage and how much you can borrow, subject to the valuation of the property and the information you supply being correct.
APRC
Stands for Annual Percentage Rate of Charge that helps you compare the cost of different mortgage deals.
Your Mortgage Illustration will show you the APRC for your mortgage. This is an annual interest rate that takes account of fees and charges to reflect the total cost of your mortgage. Your Mortgage Illustration will detail the fees that are included in this calculation. An APRC is calculated using a standard method so it provides an effective way for you to compare quotes from different lenders.
Bank of England Bank Rate
This rate can go up or down from time to time and is announced by the Bank of England's Monetary Policy Committee. Find out more about the Bank of England Base Rate.
Buildings Insurance
Buildings Insurance is insurance against the cost of repair or rebuilding of a property following damage, for example by flood, fire or storm.
Building survey
A building survey is a detailed report that can be tailored to fit your needs.
Buy to let
A buy to let mortgage is a loan you can take out to buy a property to rent out to tenants. A range of buy to let mortgages are available from Halifax.
Calculator and tools
Our mortgage calculators and tools make things easier for you. Try our mortgage overpayment calculator and rate change calculator. Our location finder tells you more about the local area. The conveyancing service will give you quotes for your legal costs.
Cashback
Certain mortgage products offer cashback as an incentive. Your Mortgage Illustration and offer letter will set out how much it will be, how we’ll send it to you and when we’ll pay it.
Completion date
The day on which a property becomes legally yours.
Conclusion of Missives
The Scottish equivalent of exchanging contracts.
Contents insurance
A contents insurance policy insuring household contents against theft and damage.
Conveyancer
A legal expert who looks after your interests and explains and deals with complicated paperwork associated with buying and selling a property. This will be either a 'solicitor' or a 'licensed conveyancer'.
Conveyancing
Conveyancing is the legal process involved in buying and selling a property.
Credit scoring
A method used to help us decide whether to lend you money. Find out more about credit scoring (PDF 70KB).