We are aware of scams involving individuals being offered loans for an advanced upfront fee. With the fraudster posing as a representative of a financial services organisation. At Pepper Money we do not charge any fees before the application stage. We would not approach you directly in this way. Your broker will be able to tell you what fees and charges the product you’re applying for has, and when they will be charged. If you think you have been a victim of such a scam, please contact your bank immediately and report it to action fraud.


Pepper Money’s guide to decoding the world of mortgage language.

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Additional Borrowing

Borrowing more money from your lender by releasing some of the value built up in the property.


A person who gives advice in a particular field. For example, a financial advisor will make recommendations on what you could do with your finances and which products are most suitable for your circumstances.

Affordability Check

An affordability check determines whether you can repay a loan if interest rates rise because a mortgage or a second-charge loan is secured against your property. Lenders are required to do this check this by law.

Annual Percentage Rate of Charge (APRC)

This is the total annual cost of the mortgage or loan and considers all the charges included in the loan. It is used to compare different products easily.

Arrangement Fee

Is an administration charge made by lenders for arranging credit – usually for a mortgage or for a business loan.


Money that is owed and should have been paid earlier, if your account is in arrears, then you are behind with your repayments


An item or goods owned by a person or company which has value. For example, property, artwork or shares in a company.

Assured Shorthold Tenancy (AST)

An AST agreement exists to protect both the tenant and the landlord. It sets out the terms in the tenancy agreement required to live in the landlord’s property. The document offers the landlord a guaranteed right to repossess their property at the end of the term. 


To give official permission for something to happen or permission to do something.

Bank Charge

This covers all charges and fees made by a bank to their customers.

Bank of England Base Rate

The interest rate set by the Bank of England.

Buildings Insurance

This covers the cost of repairing damage to the structure of your property. This includes the walls, windows, roof, and permanent fixtures and fittings such as baths and toilets. It is a requirement when applying for a mortgage. 

Buy-To-Let Mortgage

A buy-to-let mortgage is for people who want to buy a property to rent out rather than live in it themselves.

Capital Gains Tax

Capital gains tax is the amount you pay on any profit you make when you come to sell an asset, such as a second home, shares or a piece of artwork.

Capped Rate

The maximum rate of interest that your lender can charge you.

Change of Parties

This is a request to change the names of the individuals on your mortgage account.

Company Let

An agreement typically taken out by a limited company that intends to use the accommodation(s) for employees and directors.

Consent to Let

A formal, written agreement between you and your mortgage lender or landlord, giving you permission to rent out your home. 


The legal process involved when ownership of a property is transferred from the seller to the buyer. 

County Court Judgement (CCJ)

A type of court order in England, Wales and Northern Ireland that is registered against you if you fail to repay the money you owe. It is a legal step taken by someone you owe money to as part of their debt collection process. It is often a simple way for creditors to claim back money from individuals they are entitled to.

Credit Score

A number from 300 to 850 that rates a customer’s creditworthiness. The higher the score, the better a borrower looks to potential lenders.


An individual or company that extends credit to another party to borrow money, usually by a loan agreement or contract.


A person, country, or organisation that owes money.

Decision in Principle

The document from your mortgage lender confirming how much they are willing to lend you for your mortgage. It is not legally binding and is often the first step before proceeding to a Full Mortgage Application (FMA). 


When you have failed to make a payment on a loan you have taken out.


The initial amount of money you will put down on a property when you first purchase it. The minimum requirement is normally 10% of the overall price.

Early Repayment Charge (ERC)

It is a fee you might have to pay your lender if you want to end your mortgage deal before the agreed end date. Not all mortgages have an ERC, and those usually reduce the closer you get to the end of the agreement. 


A type of interest-only mortgage where you pay money into an investment called an endowment. This is then used to pay off the outstanding mortgage balance at the end of the term.

Enquiry Fee

A charge that might occur if your lender requests mortgage details from your existing mortgage lender.


It is the amount of the property that you own and that you have paid off your mortgage, plus how much you paid for your deposit. If the value of your home has increased, then your equity also includes the difference between the original price and its new value.


This is a legal arrangement in which a third party temporarily holds money or property until a condition has been met. For example, paying the full amount on a purchase.

European Standardised Information Sheet (ESIS)

This is the pre-contract disclosure document produced by the lender and contains all the legal information relating to the loan.

Financial Conduct Authority (FCA)

The body that regulates the financial services industry in the UK.

First Charge Loan

This is another way of saying ‘mortgage’ and is often used where a borrower has more than one loan secured against their property.

First Time Buyer

An individual who has not previously owned a property.

Fixed Rate Mortgage

Is a type of mortgage where the interest rate you pay is fixed or stays the same for a set period of time. 


The freeholder of a property owns it outright, including the land it is built on.

Full Mortgage Application (FMA)

A Full Mortgage Application is a document which is submitted to a lender when you apply for a mortgage to purchase a property. The application contains information about the property, employment history, and the borrowers’ financial situation. 


A common strategy used by property investors to grow their portfolios. For the strategy to work successfully, the income from renting out the property must be able to repay the debt and provide additional cash flow. 

Ground Rent

Rent that is paid under the terms of a lease by the owner of a building to the owner of the land on which the property is built on.


Someone who agrees to pay your debt if you do not pay it. For example, a parent or close relative.

High Lending Charge (HLC)

A higher lending charge is applied by lenders when the loan extended to a borrower reaches a higher percentage than the typical percentage of the property. For example, if you borrow more than 75% of the original property value. In that case, you may be subject to a higher lending charge, protecting the individual or company you are lending against if you default on your mortgage.

House in Multiple Occupation (HMO)

This is also known as a ‘house share’ where a property has at least three individuals renting a room but sharing the same facilities, such as the kitchen or bathroom. 

Individual Voluntary Arrangements (IVA)

This is a voluntary agreement between you and your creditors to help you pay off your debts at an affordable rate.

Interest Only Mortgage

This type of mortgage means that your monthly payment covers only the interest charges on your loan. However, at the end of the contract, you will still owe the original amount you first borrowed from your lender. This could be paid in one lump sum. 


An intermediary is another term to describe a ‘broker’ who advises you on applying for a mortgage.

Joint Mortgage

A mortgage that two or more people have taken out.

Land Registry

A government department with which titles to or charges upon land must be registered with.


Rather than owning the property forever, this lease gives you the right to live there for an agreed amount of time. 

Let To Buy

This is when you rent out your existing home and buy a new one to live in. It involves having two mortgages at the same time.

Loan To Value (LTV)

A percentage that shows the value of the mortgage compared to the value of the property. For example, if a property value is £100,000 and you have a £20,000 deposit, you’ll need to borrow £80,000, and your LTV will be 80%. 

Monthly Repayment

This is the set amount you pay to your mortgage lender every month.

Mortgage Deed

A mortgage deed is a legal document outlining the terms of a mortgage on the property.

Mortgage Offer

This is written confirmation from your mortgage lender confirming that your application has been checked and fully approved. The document will show how much your lender is willing to lend you. A mortgage offer is typically valid for between 3 to 6 months. 

Negative Equity

A property is in negative equity if the worth is less than the mortgage you have taken out on it. This is generally due to a fall in property prices.


The amount of money earned or paid after any deductions, such as tax and national insurance. 

New Build Property

A property that has been built within the last two years.

Outstanding Balance

The amount of money owed to your lender on your mortgage.


This is when you pay an additional amount towards your loan over your agreed monthly repayment. Any overpayments will shorten the total length of the borrowing and won’t reduce monthly payments.

Owner Occupier

A person who owns the property in which they live in.


A form to report your end-of-year expenses and benefits from employees who earned £8,500 or more.


This form explains how much you have earned over the tax year. You give this to your new employer so they know which tax bracket you’re in. 


Per calendar month.


A technique that fraudsters use to gain sensitive data, such as passwords and bank details through sending emails that look like real in the hopes to catch the person out.

Private Company

A private company/organisation that has been set up to run a business whose owners are legally responsible for all of the company’s finances.

Prudential Regulation Authority (PRA)

It is a UK financial services regulatory body responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers, and significant investment firms. 


The process of changing your mortgage without moving from the property. This could be for several reasons, such as to finance an extension by releasing equity from your property. 

Rental Income

The total amount of money collected by a landlord from the tenants.

Repayment mortgage

This is a type of mortgage where the borrower pays back both the initial loan amount and the interest from that borrowing. If you maintain all your payments, you will have paid off the total balance by the end of the mortgage. 

Repayment vehicle

Also known as a ‘repayment plan’, which is your plan to cover the final balance you will owe to the lender.

Residential Mortgage

A residential mortgage is a large loan taken out to help individuals buy a property to live in.


A form issued by the HMRC showing proof of your earnings.

Second Charge Mortgage

This loan is taken out or secured against your current property without impacting your first-charge mortgage. The value of your property and how much equity you have will determine how much you can borrow. If you take out a second charge mortgage, you will have to pay back both your first charge and your second charge as per the terms of the loan. 

Secured Credit

This is a loan or line of credit that is guaranteed by an asset. In mortgage lending that asset is the property and enables the lender to recuperate their loan should the borrower not be able to repay it, this is done by selling the asset.

Self Employed

When you are not employed by a company or an organisation and work for yourself in your own company or freelance.


Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.

Shared Ownership Mortgage

This is a type of mortgage only available to First Time Buyers. You will buy a percentage of the property via a mortgage and then pay a subsidised amount to a housing association. Because the mortgage is smaller, the borrower usually requires a lower deposit, which can be challenging to save for. 

Stamp Duty

The tax you pay when you buy a property for more than £125,000.

Standard Variable Rate (SVR)

This is a variable interest rate, which means your monthly payment could go up or down. All lenders have one, which is the rate that most products move to once the initial term ends. 

Subject to Contract

An agreement that is not yet legally binding.


Moving to a new mortgage with the same lender.


The amount of time it will take you to pay back your mortgage.

Tie In Period

The period of time that you are locked into your mortgage contract. If you leave your mortgage before the end of this period, you have to pay an early repayment charge.

Title Deeds

A legal document that proves that you own your property.

Tracker Mortgage

A type of variable rate mortgage which “tracks” a base rate – usually the Bank of England’s base rate.


A reduction in your mortgage repayments that was agreed between you and your lender.

Unsecured Credit

An unsecured line of credit is not guaranteed by any asset; one example is a credit card. Unsecured credit always comes with higher interest rates because it is riskier for lenders.

Valuation Survey

A check is carried out to ensure the property is worth the amount you will be borrowing. The survey will also look to see if any issues with the property could result in hidden costs. This is an important part of the process to ensure that all parties are protected. 

Variable Rate Mortgage

Depending on the current market the mortgage interest rates could increase or decrease. This will also impact the repayments amount that you will pay back to your lender.


The rental income from the property calculated as percentage of its value.