This refers to repaying the mortgage when moving to another property or at the end of the mortgage term.

See also Early Redemption Fees and Higher Early Redemption Fee.

This is a charge made by a lender if the mortgage is repaid within a set time period, normally in the early years of a mortgage these are now quite usual as many borrowers are opting for fixed rate and discounted rate mortgages. The penalties are usually in the form of a set number of months interest within the agreed early redemption period. As an example, if a borrower repays a mortgage within three years they may have to pay four months interest. When taking out a mortgage, borrowers should be aware of these penalties.

These are usually smaller local building societies who only lend within the regional location. There are also lenders who will not lend in Scotland or Northern Ireland because they do not have a branch presence in these countries.

When a borrower moves a mortgage from one lender to another, this is known as a remortgage. The new mortgage will pay off the existing lender and sometimes the borrower may raise additional funds over and above the old mortgage amount. With a competitive mortgage market, remortgaging has greatly increased in popularity and many borrowers usually re-mortgage to secure a competitive interest rate. It should be noted that remortgages carry costs and the borrower should also be wary of any redemption charges when considering a re-mortgage.

See Capital and Interest Mortgage.

In some cases lenders will hold back monies until certain conditions of the mortgage have been met. Normally these are essential repairs or improvements which require to be made.

Sitting council tenants have an option to purchase the property in which they live in. Usually the property can be purchased at a discount based on the length of time they have been a tenant.

Also called an Annuity mortgage or Capital and Interest mortgage. With this type of mortgage the monthly repayment includes an element of the capital sum borrowed in addition to the interest charged. In the early years of the mortgage the majority of the monthly repayment consists of interest with only a small part repaying the capital. However, as the debt gradually reduces the element of capital increases and the interest element reduces, so although the monthly repayment stays the same (assuming interest rate remain unaltered) the debt starts to reduce more quickly as the term of the mortgage progresses. On a 25 year term mortgage it would not be unusual to still owe over 50% of the original debt after the first 15 years. Providing the correct monthly repayments are made on their due dates this mortgage will guarantee to repay the total mortgage debt at the end of the mortgage term.

Measurement of the rate at which prices are rising i.e. inflation, calculated monthly by taking a sample of typical household goods and services.

This relates to monies withheld by lenders until certain mortgage conditions are met. This will normally relate to repairs or improvements to the property that the lender is insisting on.