Mortgage Glossary

Mortgage glossary for all words associated with mortgage on our website, to give our customers a greater understanding.


Is the amount of money you make on a monthly basis towards a mortgage, based upon their income, expenses, and the proposed monthly payment.


Annual percentage rate. The overall cost of a mortgage, including the interest and fees.


If you go into arrears it means you have 'defaulted' at least once on your mortgage repayments, i.e. you have missed a month's payment.

Base Rate: 

A rate of interest set by the Bank of England.

Buildings Insurance:

Insurance with covers you for damage to the structure of your home.  We require you to have buildings insurance in place when you take out a mortgage.


A Buy-To-Let property is bought with the sole intention of letting it to tenants. 


The amount of money you borrow to buy a property.


The legal process of buying and selling property.


This is the amount you are required to put down yourself towards the cost of the property.

Decision in principle:

An agreement which will allow you to see what you can borrow and over what term.

Early Repayment Charges:

Penalty fees you have to pay if you want to leave your mortgage during a specified period.


The amount of money you would have left after subtracting the amount outstanding on your mortgage from the value of your property.

Skipton UK Expat Mortgage:

Mortgages for Buy-To-Let investment properties in the UK, available to British Expats and non-British Nationals.

Fixed rate mortgage:

The interest rate stays the same for the term of the mortgage. This means you can be sure of exactly what you will be paying on your mortgage each month.

Further Advance:

A further advance is effectively taking on more borrowing.


A family member who provides support to the purchases by providing a guarantee of up to 20% of the purchase price of the property.  


A family member who acts as a guarantee.

Interest only mortgage:

You pay just the interest on your mortgage each month.

Loan to Value (LTV):

The size of your mortgage as a percentage of the property’s value.

Monthly repayment:

The amount you pay your lender for your mortgage each month.

Mortgage Term:

The amount of time you are taking the mortgage out for e.g 25 years.


Porting provides the ability for existing mortgage customers at Skipton International, to transfer their existing borrowing amount and rate onto a new property for the remaining duration of the product term. This would be subject to  meeting our affordability criteria on the total of any new borrowing.

Product Fee:

A set up fee for your mortgage.


When you change your mortgage without moving. You can do this to change to a different type of mortgage or to release equity from your home. 

Tracker mortgage:

The interest rate on your mortgage tracks the Bank of England base rate at a set margin above or below it. Please note that some products will have a 'floor' where the rate will not change once the Bank of England Base Rate falls below this level.


We require you to carry out a valuation to verify that the property is worth the amount you want to borrow.

Variable Rate Mortgage:

The interest rate on your mortgage can go up or down.