Menu Search

Glossary of selling terms



Mortgage Loan.


A recommendation about the most suitable mortgage for you made by an adviser who is regulated by the Financial Conduct Authority (FCA).

Annual Percentage Rate (APR)

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

Approved in Principle / Agreement in Principle

A certificate some lenders will give you showing the amount they will probably be prepared to lend you. This is not a guarantee but can be helpful when registering with estate agents.


Annual Percentage Rate, the total cost of a loan, including all costs, interest charges and arrangement fees, shown as a percentage rate and easily comparable with mortgage interest rates.


The sale of a property to the highest bidder.


Balance Outstanding

The amount of loan owed at a particular time

Base Rate

The interest rate set by the Bank of England is known as the Base Rate. This can change at any time. [View Base Rate Changes]


The individual(s) designated to receive the benefits from a policy.

Bridging Loan

A temporary loan advanced to help buy a new property before the existing one has been sold.

Buildings Insurance

Insurance against the cost of repair or rebuilding a property from scratch following structural damage, for example by flood, fire or storm.

Buy to Let

An investment where you buy a property – usually with a mortgage – and rent it out.



Some lenders offer "cashback" on completion of your house purchase. This could be a fixed lump sum, or an agreed percentage of the mortgage loan. Remember to check whether there will be conditions attached.


A number of linked property sales where exchange of contracts must take place simultaneously.

Closing Date

The date set for submission of offers when more than one party show interest in the property.

Completion Date

Completion of the legal transaction with all monies and documents having been distributed. This is also when the seller's solicitor will instruct the estate agent to release the keys.


See under 'Subject to contracts exchanged'

Contents Insurance

Insurance against accidental damage or theft of all moveable contents, including furniture, appliances and soft furnishings.


A formal agreement between the buyer and the seller, usually prepared by a solicitor or licensed conveyancer, detailing the terms and conditions of the sale.


Person other than and similar to a solicitor who may conduct the conveyancing.


The legal work involved in buying and selling properties.

Council Tax

Levied by local councils to cover the cost of local amenities and services.


A condition, contained within the Title Deeds or lease, that the buyer must comply with, which is usually applied to all future owners of the property. A restrictive covenant is one that prohibits the owner from doing something.

Critical Illness Cover

Pays out a lump sum if you are diagnosed with a specified critical illness.

Typical illnesses include:

  • Alzheimer’s Disease (before age 60)
  • Benign Brain Tumour
  • Blindness
  • Cancer
  • Coma
  • HIV - caught in the UK from a blood transfusion, physical assault or at work
  • Heart Attack
  • Kidney Failure
  • Loss of sight
  • Major Organ Transplant
  • Motor Neurone Disease
  • Multiple Sclerosis
  • Parkinson’s Disease
  • Stroke
  • Third Degree Burns
  • Total Permanent Disability


Death in service

Life insurance an employer provides that may be linked to a pension scheme. As cover ceases should you change jobs this is not normally suitable for mortgage protection.

Decreasing term assurance

This provides a lump sum in the event of death during the policy term. The amount of cover (sum assured) decreases over the term of the plan. This type of cover is usually used as the basis of a Mortgage Life Insurance plan to protect the declining balance of loan.


Legal documents assigning ownership of a property and/or land.

Deferred period

A period of time that has to pass before benefit from a policy is claimed. Typically Income Protection policies will have a choice of deferred periods to suit any benefit you may be eligible for from your employer.


Sum of money that represents the personal capital that the buyer is putting toward the purchase of the property.


Fees, such as Stamp Duty, Land Registry and search fees on top of conveyancing which you normally pay via your solicitor.

Discounted Variable Rate Mortgage

A set percentage discount below your lender's Standard Variable Rate for a predetermined length of time. Your monthly payments can still go up and down with this type of rate.

Draft Contract

Unconfirmed version of the contract.


Early Repayment Charge

A charge made by the lender if the borrower terminates a mortgage in advance of the terms of the particular mortgage. Normally occurs when the borrower has benefited from reduced payments or cash back in the early period of a mortgage.

Early Repayment Charge

It's important to remember that if you repay your mortgage early it can mean you end up paying an additional payment depending on the type of mortgage you have.

Energy Performance Certificate (EPC)

All properties let for private residential purposes must have an EPC, unless the property is Grade II Listed, It is used to report the energy performance of a property.


The difference between the value of a property and the amount of mortgage owed.

Exchange of Contracts

The point at which the sale becomes legally binding from which neither party can withdraw without financial penalties - In Scotland see 'Missives Concluded'.



Financial Intermediaries Managers & Brokers Regulatory Authority.

Financial Conduct Authority

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

Fixed Price

Offers are invited at the price shown

Fixed Rate Mortgage

A fixed interest rate is applied to your mortgage for a predetermined time, during which your monthly repayments will stay the same.

Fixtures and Fittings

All non-structural items included in the purchase of a property.


Ownership of the property and land upon which the property is situated.

Full Structural Survey

A full structural survey looks at all the main features of the property, including walls, roof, foundations, plumbing, joinery, electrical wiring, drains, and garden.



The practice by a seller accepting a higher price than that previously agreed with someone else.


The practice by a buyer lowering his offer just before exchange of contracts.

Ground rent

The annual fee which a leaseholder pays to a freeholder.

Guaranteed premium

Premiums will stay the same throughout the term of a policy.


Higher Lending Charge

Required by some lenders if your loan is for more than a required percentage of the value of the house. Although the borrower pays the premium, the policy protects the lender not the borrower.

Higher Lending Charge

Insurance to protect the lender from financial loss in case you fall significantly behind with your mortgage payments and your property is repossessed. This might be required if your borrowing exceeds 75% of the property's value.

Home Buyers Report

The homebuyer's report comments on the structural condition of most parts of the property that are readily accessible, but does not involve in-depth investigation or the testing of water, drainage or heating systems.

Housing Association

A non-profit making body which lets you buy a percentage of the property and pay rent on the rest.



Independent Financial Advisor


Investments Managers Regulatory Organisation. Regulates investment managers.

Income protection

Provides tax-free income in the event of you not being able to work due to ill health. Payments are usually paid monthly until you either return to work, the policy term expires, you retire or death occurs.


When a seller instructs an estate agent to market a property.

Interest Only Mortgage

You pay the interest on your mortgage to the lender each month until the end of the mortgage term. The capital borrowed does not reduce and it is your responsibility as a borrower to ensure that you have a method or means of repaying the capital at the end of the term.


Joint Agency

Where two estate agents work together to market a property.

Joint Mortgage

A mortgage where there is more than one individual named responsible for the mortgage.


Land Certificate

A Land Registry certificate proving ownership of property.

Land Registry

The Government organisation that holds records of all registered properties in England and Wales.


Life Assurance Unit Trust Regulatory Organisation.


To be given ownership of a property but not the land it is built on. This normally requires payment of ground rent to the landlord. A leasehold is normally offered for either 999 years, 99 years or shorter terms.

Lender's Arrangement Fee

This fee may be charged by the lender to cover their administration costs in setting up your mortgage.

Lender's Standard Variable Rate

The interest rate set by the lender and varies from lender to lender. If your mortgage is on this rate your payments will vary in line with lender rate charges.

Level term assurance

A policy that pays a fixed lump sum upon death during the policy term.

Local Authority Search

An application made to the appropriate Local Authority requesting details of any planning or other matters which might affect the property being sold.


Maintenance Charge

A charge made towards the upkeep of a leasehold property.

Missives Concluded

Completion of the legal transaction with all monies and documents having been distributed. This is also when the seller's solicitor will instruct the estate agent to release the keys.

Mortgage Deed

A legal document relating to the mortgage lenders interest in the property.

Mortgage life insurance

A decreasing term life insurance plan that’s designed to help protect a repayment mortgage by paying a lump sum in the event of death during the policy term. These are usually flexible plans with options available to pay insurance premiums and mortgage payments in the event of you becoming incapacitated by illness or injury.

Mortgage Offer

A formal written offer made by a bank or building society to lend an approved amount to purchase a property.

Mortgage Term

This is the period of time over which your mortgage is proposed to run. Remember the longer your mortgage runs, the more interest you are charged overall so care needs to be taken to ensure that the term chosen is suitable.


The selection of two or more estate agents to act on the seller's behalf, usually incurring a higher fee than if the sale is completed by a sole agency.


Negative Equity

When the value of a property is less than the outstanding sum owed on a mortgage.



A bid made by a prospective buyer, this is not legally binding.

Offers Over

Offers are invited above the price shown.


Independent professional bodies who investigate complaints on behalf of customers against estate agents, solicitors and insurance companies.



The term used when a property is being sold, where a tenant has legal right of occupation.


Premium Payments to the insurance company to purchase cover.

Premium protection

Covers the cost of policy premiums during periods of unemployment due to illness or injury. Also known as waiver of premium.

Private Treaty

The way in which most house sales are completed in England and Wales.


Your home or the property you wish to sell or buy.


Repayment Mortgage

Your monthly repayment includes part interest and part capital repayment. So long as you meet all of the payments required by the lender your mortgage will gradually reduce until it is repaid in full at the end of the mortgage term.

Repayment Mortgage

Monthly interest combined with capital repayment against the original sum borrowed.


When loans are in default the mortgage lender can repossess the property and sell it so they can repay the debt.


Holding back part of a mortgage loan until repairs to the property are satisfactorily completed.

Reviewable premium

Premiums are very likely to change over the term of the policy, an insurer may choose to review premiums at set intervals such as every five years.


Sale Agreed

A verbal agreement from the seller.


Checks of local council records for planning applications and restrictions, etc.

Sole Agency

The choice of a single estate agent to act on the seller's behalf, incurring a lower fee than multi-agency.


Legal expert handling all documentation for the sale and purchase of a property.

Stamp Duty

A tax paid to the Government by the buyer upon completion.

Standard Variable Rate

The interest rate set by the lender and varies from lender to lender. Your monthly payments will vary in line with lender rate changes.

Subject to Contract

Words used to indicate that an agreement is not yet legally binding.

Sum assured

The amount of money you are insured for from outset of a policy.


An inspection made by a qualified surveyor. There are three main types of survey. Valuation report (for mortgage purposes), Homebuyers report (also comments on general condition) and Full Structural survey (examines structural detail).



The process whereby the seller asks for written offers on a property usually with a set closing date.

Terminal illness benefit

The sum assured from a life assurance plan becomes payable if you are diagnosed with a terminal illness where life expectancy is considered to be less than 12 months.


The ultimate record of ownership of a property, the evidence of which is found in the title deeds.

Tracker Rate Mortgage

This type of rate is usually defined as a percentage amount above, below or equal to the Bank of England's Base Rate. As the Bank of England can change rates at any time your monthly payment can vary as your rate follows or "tracks" this base rate.

Transfer Deeds

The Land Registry document that transfers legal ownership from seller to buyer.


By placing the benefits of a policy “in trust” you can ensure that the correct person receives the proceeds. Assets owned in a trust do not form part of an estate of a deceased person.


Under Offer

When the seller has accepted an offer on the property but contracts have not yet been exchanged.


A person who assesses and classifies the degree of risk that a proposed insurance represents.


Valuation Fee

Normally charged by the lender to carry out a basic inspection of the property. The resulting valuation report is solely for the lender's benefit and is used to assess mortgage suitability.

Variable Interest Rate

Rate of interest payment that fluctuates over time inline with general interest rates.


The legal name sometimes used to describe the seller of the property.

Verbal Offer

Offer from prospective purchaser, not legally binding on either party.



Mode of commencing legal proceedings.