Additional Borrowing
The term used when a customer increases their borrowing to release some of the equity available in their property.

Additional Permitted Subscription (APS)
An additional ISA allowance that is available to the surviving spouse or civil partner of an ISA holder, this is available on top of your normal annual ISA allowance.

Administration Fee
The fee charged for the administration involved in arranging the loan.

Agreement in principle (AIP)
It is always recommended that you speak with us before you begin to look for a property, so that you can establish how much you can borrow. You can use this confirmation to prove to a seller that you can afford to buy their property.

Annual Equivalent Rate (AER)
This shows what the interest rate would be if interest was paid and compounded once each year. This allows you to compare products more easily.

Annual Interest
An account which pays interest on your savings once a year, this is usually at the Society’s year end on 31 December.

Application Fee
Some products may have an associated application fee. This application fee is charged in order to cover the costs associated with the processing of the application.

APR
Annual percentage rate: the overall cost of a mortgage, including the interest and fees. It assumes you will have the mortgage for the whole term.

APRC
APRC stands for the Annual Percentage Rate of Charge used to compare loan offers.

Arrears
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. Contact us as soon as possible if you think you may go into arrears. If you are applying for a mortgage and have been in arrears previously, it is important that you declare this at the time you apply to us.

Banded Interest
Interest is paid in “bands” for example if an account earns 1% up to the balance of £10K and 1.5% on a balance over £10K and the account has a balance of £25K, the first £10K will earn 1% and the remaining £15K will earn 1.5%.

Bank of England Base Rate
The Bank of England Base Rate is set by the Bank of England.

Base rate
A rate of interest set by the Bank of England, which tracker mortgages and standard variable rate mortgages usually follow.Base rate usually means the Bank of England base interest rate. Savings interest rates are normally determined by base rate (along with other factors).

Bond
A bond is a savings account in which you will keep your money for a set period of time for a set interest rate. It means that you can’t generally access your money early with a bond.

Broker
An adviser who can help you arrange a mortgage. The Society welcomes applications from applicants whether directly or through a mortgage broker.

Building Society
A building society is a type of financial institution that provides mortgages and savings accounts to its customers (some provide other banking services as well). Many of a building society’s customers are also members – the society is run for the benefit of members rather than shareholders.

Buildings Insurance
Insurance that covers you for damage to the structure of your home. A lender will require you to have this in place when you take out a mortgage.

Buy-to-let
A buy-to-let property is bought with the sole intention of letting it to tenants. We offer special buy-to-let mortgage deals for this purpose.

Capital
The amount of money you borrow to buy a property. Your capital is the overall amount of money invested.

Capital & Interest Repayment
Your monthly payment covers the interest and also reduces the total balance outstanding.
Capitalised Interest The interest your money has earned, which is added to your original investment.

Capped rate
If your mortgage deal has a capped rate, the interest rate charged by the lender will never exceed the upper ‘capped’ limit, regardless of increases to the Bank of England base rate or the lenders Standard Variable Rate.

Cashback mortgage
With this type of mortgage, the lender will give you a certain amount of cash on completion. You should factor this into the total cost of your mortgage over the initial period to decide whether it’s a good deal.

CCJ
County Court Judgement. These are made against you for non-payment of debt, and could make it harder for you to get a mortgage. Even when satisfied, a County Court Judgement will remain visible on your credit file for a number of years.

Collar
If your mortgage deal has a collar, your interest rate will not fall any lower than the specified amount. So if rates drop to 3.75% and your deal is collared at 4%, you’ll miss out on the savings that this lower rate would bring. The Society does not offer collared rate mortgage products at this time.

Conveyancing
The legal process you must go through when you buy or sell property. This work will usually be undertaken by a solicitor or licensed conveyancer.

Credit Reference Agency
Credit reference agencies provide factual information with your consent, about how you have managed your existing and previous credit arrangements, so that we can make a decision about whether to lend you.

Credit Report
This is the report produced by the credit reference agency, detailing your credit performance.

Daily Interest
The interest chargeable on the outstanding mortgage balance is calculated every day rather than at the end of each week, month or year.

Deposit
This is the amount you are required to put down yourself towards the cost of the property. The minimum deposit you will usually need to obtain a mortgage with the Society is 10% of the purchase price / property value. A deposit is an amount that you pay into a savings account.

Deposit Account
An account which does not give you membership rights to the Society.

Depositor
The person who pays money into a savings account.

Discounted-rate mortgage
A discounted-rate deal is one where the interest rate you are charged is a set amount less than our standard variable rate (SVR). For example, if our SVR was 5.5% and the discount is 1%, you would pay 4.5%. This is a variable rate and should the SVR increase or decrease, the rate you pay would alter too.

Early repayment charges (ERCs) A fee you would have to pay if you want to leave your mortgage during a specified period, usually the period of the initial deal. Any ERCs are detailed within the KFI document provided to you.

Endowment mortgage
A form of interest-only mortgage where you also pay money into a type of investment called an endowment policy to repay all or some of the mortgage off at the end of the term.

Equity
The amount of the property that you own outright, i.e. your deposit plus any capital you’ve paid off on your mortgage in addition to any increase in value in the property.

Equity release scheme
An equity release scheme allows older homeowners to release the cash tied up in their property. There are two types: lifetime mortgages and home-reversion schemes. These schemes should only be taken out after getting independent financial and independent legal advice. It is also appropriate to discuss your plans with any immediate family if you are thinking of arranging an equity release mortgage.

Exit Fee
This is a closure administration fee payable to the Society when you fully repay your mortgage. Our current mortgage exit fee can be located within our Tariff of Charges.

Extended Tie In Period
Some lenders stipulate that the borrower keep their mortgage with that lender for a period of time after the agreed, discount or fixed rate period has ended. If the borrower moves their mortgage elsewhere during the tie in period, they may have to pay an early repayment charge. The Society does not apply extended tie in periods to its products at this time.

Family mortgage
Used by family members (usually parents) who want to help first-time buyers get onto the property ladder. Either the parents savings are balanced against the child’s (or family member’s) debt, so the amount they owe and pay in interest is reduced or the parents may offer an additional property as security. This would mean that the Society will take a legal charge over the parents home.

Financial Conduct Authority (FCA)
The FCA is the Financial Conduct Authority, a regulatory body in the UK. The FCA regulates financial firms providing financial services to consumers and operates independently of the government.

Financial Services Compensation Scheme (FSCS)
The Financial Services Compensation Scheme was established under the Financial Services and Markets Act 2000. Its purpose is to protect your deposits should your financial institution be unable to repay them. Your eligible deposits are protected up to a total of £85,000 per depositor.

First Time Buyer
A person buying their first property.

Fixed Rate
A rate of interest that stays the same for a set period of time.
Fixed-rate mortgage The mortgage interest rate stays the same for the initial period of the deal. This means you can be sure of exactly what you will be paying on your mortgage each month, as your rate won’t go up – or down – with the Bank of England base rate.

Flexible mortgage
A flexible mortgage deal allows you to overpay, underpay or even take a payment holiday from your mortgage. This can help you pay off your mortgage early and save money on interest, but flexible mortgages are usually more expensive than conventional ones.

Freehold
You own the building and the land it stands on.

Gazumping
When an offer has been accepted on a property but a different buyer then makes a higher offer, which the seller accepts.

Gazunder
Where a buy will lower the amount of an offer that has been made to (the seller of a property), typically just before the exchange of contracts.

Gross Interest
Interest paid before the deduction of income tax.

Guarantor
A third party who agrees to meet the monthly mortgage repayments if you are unable to. This is most common with first-time buyers, and the guarantor is usually their parent or guardian.

Help to Buy
The government has launched a number of different Help to Buy schemes, including equity loans, mortgage guarantees, ISAs and specific schemes for Scotland and Wales. They all aim to make home-buying easier.

Help To Buy ISA
A tax-free savings account, into which the government pays first-time buyers a cash bonus towards the purchase of a property. For every £200 saved, the government will deposit an additional £50, up to a maximum of £3,000.

Help to Buy: ISA
These are a type of savings account designed for people to save for their first home. You can pay in up to £200 per month (plus a lump sum of £1,200 in the first month) and the Government will add a bonus of 25% when you buy a house. The bonus is capped at £3,000, so the maximum you should invest is £12,000 in an account, unless the interest rate is better than other types of accounts.

Higher lending charge (HLC)
If you are borrowing more than 80% of the property’s value, we will arrange a mortgage indemnity policy. This indemnity policy protects the Society in the event of a loss experienced in the event of a repossession. The policy protects the Society and not the borrower, however, the premium is the responsibility of the mortgage borrower. From time to time the Society may make a contribution towards this payment. Please refer to your KFI for further information.

Interest Rate
An interest rate is the amount of money paid by or paid to your bank or building society for the use of money and is most often expressed as a percentage rate. You can receive interest on the money you save, but will pay interest on money borrowed. Interest rates vary across financial service providers so it is always beneficial to compare rates to find the best product for your needs.

Interest-only mortgage
You only pay the interest on your mortgage each month, without repaying any of the capital loan itself. The idea is that you build up enough money to be able to pay off the mortgage at the end of the term in other ways – for example through investing in stocks and shares, pension, endowment or the sale of another property.

Intermediary
An adviser who can help you arrange a mortgage. The Society welcomes applications from applicants directly or through a mortgage intermediary.

ISA (Individual Savings Account)
An ISA is a type of savings account which is not taxed by the government. The government sets a limit on the amount of money you can save in any one tax year. The tax year runs from 6 April one year until 5 April the following year.

Joint mortgage
A mortgage taken out by two or more people. This might be used if you buy a house with a partner or friend, and can also be used by parents who want to help their children buy a property.

Junior ISA
Junior ISAs were introduced on 1 November 2011 as a replacement to Child Trust Funds (CTFs). A child can open their own account from age 16, otherwise a person with parental responsibility can do it. They are available to those who are under the age of 18 and do not have a CTF, although you can transfer a CTF to a JISA if you wish.

Key Facts Illustration (KFI)
A KFI requires all lenders to set out the details of all associated rates and fees for a mortgage product in the same format to enable customers to easily compare products.

Land Registry
The official body responsible for maintaining details of property ownership.

Leasehold
You own the building but not the land it stands on, and only for a certain period (anything up to 999 years). You may find it hard to get a mortgage if there are fewer than 80 years left on the lease of the property you want to buy.

Lifetime mortgages
See ‘equity release schemes’.

Loan-to-value (LTV)
The size of your mortgage as a percentage of the property’s value.

Lump Sum Payment
When a borrower makes a one-off payment to reduce the outstanding balance on their mortgage.

Maturity
The day when an account reaches the end of its fixed term.

Maximum Balance
The maximum amount you can invest in an account as specified in its key product information.

Minimum Balance (or minimum operating balance)
The minimum balance is the lowest amount you can have in the account before the bank or building society closes it. Often this can differ from the minimum amount required to open the account.

Monthly Interest
An account which pays a monthly interest to you potentially providing an “income”.

Monthly repayment
The amount you pay your mortgage lender each month. If you’re on a repayment mortgage (the most common kind), the payment will cover a percentage of your mortgage plus interest.

Mortgage agreement in principle (AIP)
See ‘agreement in principle’.

Mortgage deed
A formal contract between lender and borrower, outlining the legal obligations of the borrower and the rights the lender has if the borrower fails to make a repayment.

Mortgage payment protection insurance (MPPI)
Insurance that covers your mortgage, usually for a year, if you are unable to work due to accident, sickness or unemployment. It is also known as ASU insurance.

Mortgage term
The amount of time you are taking the mortgage out for – 25 years, for example.

Mutual
A financial institution owned by its members as a mutual organisation, being a mutual means that we are owned and run for the benefit of our many members.

Negative equity
When the value of your home falls to a level that is below the amount remaining on your mortgage.

New Build Property
“A New Build Property is defined as:

• a building that has been built in the last 12 months which includes property bought directly from a builder or developer
• a property that has yet to be occupied for the first time and/or
• a property that is yet to be occupied in its current form, for example following a renovation or conversion. The property being purchased must have a recognised satisfactory Structural Defects Warranty.

We may lend up to a maximum of 90% Loan to Value (LTV) on New Build Properties. “

Notice Account/Period
An account which requires a specific period of notice to be given by the account holder before money can be withdrawn.

Offset mortgage
An offset mortgage links your mortgage with your savings and, sometimes, your current account. Your credit balances are offset against your mortgage debt so you only pay interest on the difference, while also paying off the capital.

Passbook
Generally issued by building societies, you’d use a pass book to make withdrawals or to pay into your account. All the transactions are printed into the pass book, giving you a handy, instant reference.

Penalty
When a notice period applies to an account a penalty may be incurred for an immediate withdrawal or the closure of an account, subject to the account terms. The penalty would usually be calculated on the amount withdrawn.

Personal Savings Allowance
The amount of interest you can earn on your savings without paying tax. Your allowance depends on whether you’re a basic, higher or additional-rate tax payer. Interest from ISAs doesn’t count towards this allowance.

Portability
A portable mortgage allows you to transfer your borrowing from one property to another if you move, without paying arrangement fees.

Porting
The term used to describe transferring your current mortgage rate from one property to another when you sell your property and buy another. This is subject to terms and conditions.

Product Fee
The fee payable to obtain a particular product. Where fees are chargeable on any mortgage product, this will be clearly stated on any promotional items and the Key Facts Illustration. In some circumstances, this fee can be added to the loan, however, if you chose to do this you will pay interest on the sum added.

Prudential Regulation Authority (PRA)
The PRA is a part of the Bank of England and is a regulatory body responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and major investment firms.

Rebuild cost
For insurance purposes: the cost of rebuilding your home if it is destroyed.

Regular Savings Accounts
A regular savings account is a specialist type of account, designed to help you build a savings pot, and they will often pay a higher rate of interest than a normal savings account.

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

Repayment mortgage
You pay off the mortgage interest and part of the capital of your loan each month. Unless you miss any repayments, you are guaranteed to have paid off the mortgage by the end of the term.

Repayment vehicle
This is required if you take out an interest-only mortgage, this is the means by which you’re intending to pay off your mortgage at the end of the term – for example, another property, or a stocks and shares portfolio.

Right to Buy scheme
Originally intended to enable tenants of council houses to buy the homes they lived in, this is now being opened up to housing association tenants too.

Service charge
If you are purchasing a Leasehold property, you are likely to be responsible for management and service charges. This information should be available from the selling agent or the vendor.

Share Account
An account which will qualify you for membership of the Society.

Shared ownership
You buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share, which is owned by the local housing association.

Stamp duty
Stamp duty land tax (SDLT) is payable when you buy a property for more than £125,000 (or £40,000 if it’s a buy-to-let property or second home).

Standard Variable Rate (SVR)
An SVR mortgage or a scheme that is linked to the Society’s SVR, means that your payments can go up or down according to changes in interest rates. The Society’s SVR may also be the rate you will be charged after your initial mortgage deal period ends. This could be higher or lower than your original rate. Unlike tracker mortgages, SVRs do not track above or below the Bank of England Base Rate at a set percentage. Instead, the rate you pay on an SVR mortgage will be determined by the Society. So, if the Bank of England Base Rate went up by 1%, the Society could choose: • Not to increase the SVR; or • To increase the SVR (we could choose to increase this by any amount less than 1%, 1% exactly or even make an increase greater than 1%); or • To decrease the rate. The Society can also increase or decrease the SVR at any time – not only after Base Rate changes.

Standing Order
A standing order is an automated payment that you can set up from your current account. It will send a regular payment (normally monthly, quarterly or yearly) to the person or company you wish to pay. In the context of savings accounts, some will let you set up a regular standing order to your savings account so you don’t have to remember to physically transfer the money yourself.

Statement of Deduction of Tax
This will show you how much interest you have earned on your account during a specific tax year. These can be issued to you on written request and can be used when claiming any tax back from HMRC.

Sub-prime/non-conforming mortgage
A sub-prime, or non-conforming, mortgage is geared towards people who have had credit problems. It is much harder to get a sub-prime mortgage than before the credit crunch of 2008.

Switching
When a customer moves to a new mortgage with the same lender, e.g. their fixed rate period ends and they move to a discount rate mortgage.

Tie-in period
This is the period during which you are ‘locked in’ to your mortgage deal. You’ll have to pay an early repayment charge if you leave your mortgage during this period. Avoid mortgages that tie you in after your introductory rate has ended.

Tiered Interest Rate
When an account offers a tiered interest rate this means the interest rate you receive depends on the amount/balance in your account. When the balance goes above a specified level the interest rate increases on the whole balance. Tax-free indicates that interest earned is exempt from UK income tax.

Tracker mortgage
The interest rate on your mortgage tracks the Bank of England base rate at a set margin above or below it. The Society does not presently offer tracker mortgages.

Underwriting
The process that a lender uses to assess the creditworthiness or risk of a potential customer.

Underwriting Fee
A fee charged where additional underwriting of the loan is required due to the loan size. Charged for loan amounts in excess of £275,000.

Valuation survey
We will always carry out a valuation survey to check whether the property is worth roughly the amount you’re paying for it. You should always consider arranging your own survey too, to check for structural problems.

Variable Rate
A rate of interest that may change over time.
Variable-rate mortgage If you have a mortgage product that is linked to our standard variable rate, the interest rate on your mortgage can go up or down according to any changes we make to the standard variable rate.

Year End
The end of the accounting year, usually when interest is paid. This is given in the product information which was supplied at the time of application.