Mortgage Glossary UK 2026 — A to Z of Mortgage Terms

An Agreement in Principle is a conditional indication from a mortgage lender of how much they would be willing to lend you, based on an initial assessment of your income, expenditure, and credit history. It is not a formal mortgage offer or guarantee of lending. Also known as a Decision in Principle (DIP) or Mortgage in Principle (MIP), an AIP is typically valid for 60 to 90 days and usually involves a soft credit check that does not affect your credit score. Having an AIP in place before you begin house hunting demonstrates to estate agents and sellers that you are a serious buyer with confirmed borrowing capacity — many agents will not arrange viewings without one. Use our affordability calculator to estimate how much you may be able to borrow before seeking an AIP.

Amortization refers to the process of paying off a mortgage debt through regular scheduled payments over time. Each monthly payment on a repayment mortgage is split between interest charged on the outstanding balance and a repayment of the capital itself. In the early years of a mortgage, the majority of each payment goes towards interest with only a small amount reducing the loan balance. As the balance falls and more of each payment reduces the capital, the amortization accelerates — this is why overpayments made early in a mortgage have a disproportionately large effect on the total interest paid and the mortgage term. An amortization schedule shows the full breakdown of every payment over the life of the mortgage, and you can model different scenarios using our overpayment calculator.

The Annual Percentage Rate is a standardised figure representing the true annual cost of borrowing, expressed as a percentage. Unlike a headline interest rate, APR takes into account not just the interest charged on the mortgage but also compulsory fees such as arrangement fees spread across the full mortgage term. For mortgages, APR is a useful tool for comparing the overall cost of different deals, especially when one product has a lower interest rate but higher fees. However, because most borrowers remortgage every two to five years rather than holding a mortgage for its full term, the APR calculation can understate the effective cost of short initial deals with high arrangement fees. Always model the total cost over the initial rate period when comparing mortgage products.

An arrangement fee, also called a product fee or booking fee, is a charge levied by a lender for setting up a mortgage. Arrangement fees can range from nothing to £2,000 or more, and mortgages with lower headline interest rates often carry higher arrangement fees as a trade-off. You can typically pay an arrangement fee upfront or add it to the mortgage loan — adding it to the loan means you pay interest on the fee for the life of the mortgage, increasing the total cost. When comparing mortgage deals, always calculate the total cost including arrangement fees over the initial rate period, not just the monthly repayment. A deal with a £1,500 fee and a 0.1% lower rate may or may not be better value depending on your loan size and how long you hold the deal.

The Bank of England base rate is the interest rate set by the Bank of England's Monetary Policy Committee (MPC), which meets eight times per year to review and potentially adjust the rate. The base rate is the rate at which the Bank of England lends money to commercial banks and building societies, and it has a direct influence on the interest rates those institutions offer their own customers. When the base rate rises, mortgage rates — especially for tracker and variable rate products — typically increase, making borrowing more expensive. When the base rate falls, tracker mortgages become cheaper automatically and lenders may pass on savings to customers through lower rates on new fixed deals. Fixed rate mortgage holders are unaffected until their initial deal ends and they need to remortgage.

A bridging loan is a short-term secured loan used to bridge a financing gap, most commonly when a property buyer needs to complete a purchase before their existing property has sold. Because they are designed to be held for only weeks or months, bridging loans carry significantly higher interest rates than standard mortgages — often 0.5% to 1.5% per month — and come with arrangement fees and sometimes exit fees. They can also be used for property development, auction purchases where completion is required within 28 days, or refurbishing properties that would not qualify for a standard mortgage in their current condition. Bridging loans are a specialist product and should only be arranged through a broker with demonstrable experience in this area, as the costs and risks are substantial.

Buildings insurance is a policy that covers the cost of repairing or rebuilding your home if it is damaged by an insured event such as fire, flood, storm, subsidence, or vandalism. If you have a mortgage, your lender will require buildings insurance to be in place from exchange of contracts — not just completion — because the financial risk of damage passes to the buyer at exchange. The sum insured must reflect the full rebuild cost of the property (not its market value), and most policies are index-linked so coverage keeps pace with construction cost inflation. Your lender may offer its own buildings insurance, but you are not obliged to take it and may find a better-value policy independently. Failing to maintain adequate buildings insurance is a breach of your mortgage conditions.

In the context of mortgages, capital refers to the outstanding loan balance — the actual amount of money borrowed that remains to be repaid. On a repayment mortgage, each monthly payment reduces the capital balance as well as servicing the interest charged. On an interest-only mortgage, the monthly payment covers only the interest, so the capital balance remains unchanged throughout the mortgage term until it must be repaid in full at the end. Building equity in a property means the capital balance is falling relative to the property value, either because you are repaying the mortgage, the property is rising in value, or both. Overpaying your mortgage reduces the capital balance faster, saving a significant amount in total interest paid over the life of the loan.

A capped rate mortgage is a type of variable rate mortgage where the interest rate can rise and fall with the market but cannot exceed a set maximum level — the cap. This gives borrowers protection against large rate increases while still allowing them to benefit from falling rates, unlike a fixed rate which locks in both ceiling and floor. Capped rate mortgages are less common in the UK market than fixed or tracker products, and they typically carry a higher starting rate than equivalent fixed deals as the lender prices in the value of the cap guarantee. Some capped rate mortgages also include a collar — a minimum rate below which the interest rate cannot fall — limiting the upside from rate cuts. They represent a compromise between certainty and flexibility.

A cashback mortgage is a product where the lender pays the borrower a lump sum of cash upon completion of the mortgage, typically as a percentage of the loan amount or a fixed sum. Cashback can be used for anything — covering legal fees, funding home improvements, or providing a financial buffer in the early months of homeownership. However, cashback mortgages nearly always carry higher interest rates than equivalent non-cashback deals, and the cashback must usually be repaid if you remortgage or sell within a specified period. When assessing whether a cashback mortgage represents good value, calculate the total interest cost over the initial rate period and compare it against a lower-rate deal where you fund your own costs separately.

Completion is the final stage of a property purchase, when ownership legally transfers from the seller to the buyer. On completion day, your solicitor transfers the purchase funds — your mortgage drawdown plus any remaining deposit balance — to the seller's solicitor, who then confirms receipt and authorises release of the keys. Your lender formally activates the mortgage and repayments begin. Completion typically takes place one to four weeks after exchange of contracts, on a mutually agreed date. Your solicitor handles registration of the title in your name with HM Land Registry and payment of any Stamp Duty Land Tax owed to HMRC. Once completion occurs, the property is yours and you carry full responsibility for it.

Conveyancing is the legal process of transferring ownership of a property from seller to buyer. It encompasses all legal and administrative work from initial solicitor instruction through to completion and Land Registry registration. The buyer's conveyancer conducts property searches (local authority, drainage, environmental, and others as appropriate), reviews the draft contract and title documents, raises enquiries about any issues, reports to the buyer and their lender, handles exchange and the transfer of funds on completion, pays stamp duty to HMRC, and registers the new ownership. Conveyancing fees typically range from £1,000 to £2,000 plus disbursements for a standard residential purchase. Get quotes from at least three providers before instructing.

A Decision in Principle is another name for an Agreement in Principle or Mortgage in Principle — a conditional indication from a lender that they would be willing to lend you a certain amount, subject to a full application, property valuation, and verification of all information provided. Some lenders use the term DIP specifically when the assessment involves a soft credit check, while others use it interchangeably with AIP. Having a DIP allows you to house hunt with a lender-confirmed budget and demonstrates your financial credibility to sellers and agents. The DIP does not commit the lender to lending, and the final mortgage offer may differ if your circumstances, the property, or your fully assessed credit history differs from the initial assessment.

A mortgage default occurs when a borrower fails to meet the repayment obligations in their mortgage agreement — typically when they miss one or more monthly payments. Lenders have formal arrears management processes and are required by FCA regulations to treat borrowers in financial difficulty fairly before taking enforcement action. A single missed payment may be recorded on your credit file, affecting your credit score for several years. Sustained defaults can lead to formal demands for repayment and ultimately to the lender seeking a court order to repossess the property and sell it to recover the outstanding debt. If you are struggling to meet repayments, contact your lender immediately — options including temporary payment holidays, interest-only periods, or term extensions may be available.

Your deposit is the amount of money you contribute towards the property purchase price from your own funds (or from a gifted sum), with the remainder funded by the mortgage. The size of your deposit determines your Loan to Value ratio, which is one of the most significant factors in the mortgage rate you are offered. The minimum deposit accepted by most UK lenders in 2026 is 5% (95% LTV), though 10% provides access to meaningfully better rates and a wider product choice. A deposit of 40% or more (60% LTV) typically unlocks the best rates available. As well as the deposit itself, budget for solicitor fees, survey costs, and other purchase expenses — the deposit is separate from these additional costs. Use our affordability calculator to understand how your deposit size affects your borrowing options.

An Early Repayment Charge is a fee your lender charges if you repay your mortgage — in full or in part beyond your permitted annual overpayment allowance — during your initial deal period, whether fixed, tracker, or discount. ERCs are designed to compensate lenders for lost interest income when a borrower exits a deal early, and they can be substantial: typically between 1% and 5% of the outstanding mortgage balance. The percentage usually decreases each year of the deal — a five-year fixed rate might carry a 5% ERC in year one, 4% in year two, and so on. ERCs apply whether you are selling your property, remortgaging to another lender, or switching to a different deal with your existing lender. If your mortgage is portable, you may be able to transfer it to a new property without triggering the ERC. Most lenders allow annual overpayments of up to 10% of the outstanding balance without triggering an ERC — use our overpayment calculator to model the impact of overpaying within your allowance.

Equity is the portion of your property's value that you own outright — the difference between the current market value and the outstanding mortgage balance. If your home is worth £300,000 and your mortgage balance is £180,000, your equity is £120,000, or 40% of the property's value. Equity increases when you pay down the mortgage capital and when the property value rises. Building equity matters because it reduces your LTV when you remortgage (potentially unlocking better rates), and it represents wealth that can be accessed through remortgaging or by selling the property. Negative equity — where the mortgage balance exceeds the property value — makes selling or remortgaging very difficult and should be avoided through adequate deposit size at purchase.

Exchange of contracts is the point at which buyer and seller become legally committed to completing the property transaction. Before exchange, either party can withdraw without legal penalty (though costs already incurred may be lost). At exchange, both buyer and seller sign identical contracts simultaneously through their respective solicitors, and the buyer pays a deposit — typically 10% of the purchase price — held by the seller's solicitor. A completion date is also agreed at exchange. If the buyer pulls out after exchange, the deposit is forfeited. If the seller pulls out, they must return the deposit and may face a claim for damages. Exchange is the moment when your purchase becomes a legal certainty, and it is what first-time buyers are working towards from the moment their offer is accepted.

A fixed rate mortgage locks the interest rate at a set level for an agreed initial period — typically two, three, five, or ten years — regardless of changes to the Bank of England base rate or the lender's SVR. During the fixed rate period, your monthly repayments remain constant, providing certainty and making budgeting straightforward. This predictability comes at a cost: fixed rates are generally slightly higher than the best tracker rates at the same time, and if interest rates fall significantly you will not benefit until your fixed rate expires. At the end of the period, the mortgage reverts to the lender's SVR unless you remortgage to a new deal. Fixed rates are the most popular mortgage type in the UK by a significant margin. Learn more at our mortgage types guide.

Freehold means you own the property and the land on which it stands outright and indefinitely — there is no time limit on ownership and no landlord to pay ground rent to. Houses in the UK are almost always sold freehold. Freehold ownership means you have full control over the property (subject to planning regulations and any restrictive covenants in the title deeds), you carry no ongoing rent obligation to a third party, and you are solely responsible for all maintenance. Freehold is generally preferred over leasehold as it comes with fewer complications, costs, and restrictions. If you are buying a house being sold as leasehold, this is unusual and warrants careful investigation — leasehold houses have historically caused significant problems for buyers regarding ground rents and permission fees.

Gazumping occurs when a seller, having accepted an offer from one buyer, subsequently accepts a higher offer from a different buyer — leaving the original buyer out of the transaction, often after they have spent money on surveys and legal fees. Gazumping is legal in England and Wales because property offers are not legally binding until contracts are exchanged. It is more common in competitive, fast-moving markets. Buyers can reduce the risk by pushing for a quick exchange of contracts, asking whether the seller will take the property off the market on acceptance, and using a solicitor who commits to working at pace. Gazumping is effectively impossible in Scotland, where the legal process creates a binding agreement at an earlier stage through conclusion of missives.

Ground rent is an annual charge payable by the holder of a leasehold property to the freeholder as a condition of the lease. The Leasehold Reform (Ground Rent) Act 2022 banned ground rents on new residential leases in England and Wales, restricting them to a nominal peppercorn. However, leases granted before June 2022 may still contain ground rent provisions, including clauses that cause rent to double every 10 or 25 years. Such clauses have created serious problems — properties with escalating ground rents can be very difficult to mortgage and sell as their value is impaired. Buyers of leasehold properties should ask their solicitor to check and explain any ground rent clauses in detail before proceeding with a purchase.

A guarantor mortgage is one where a third party — typically a parent or close family member — agrees to cover the mortgage repayments if the borrower cannot do so. The guarantor's income, savings, or property can be taken into account during the affordability assessment, allowing borrowers who could not otherwise qualify to access the mortgage market. If the borrower defaults, the guarantor becomes fully liable for the repayments and may ultimately risk their own assets or home if the debt cannot be recovered. Both parties should take independent legal advice before proceeding. Some lenders offer specialist family-assisted products — such as springboard mortgages using the guarantor's savings as additional security — which limit the risk to the guarantor's savings rather than their home.

Help to Buy was a range of UK government schemes designed to assist first-time buyers in purchasing properties. The most prominent — the Help to Buy Equity Loan scheme in England — allowed first-time buyers to purchase new-build properties with a 5% deposit, with the government providing an equity loan of up to 20% (or 40% in London), interest-free for the first five years. The scheme closed to new applications in October 2022 and all equity loans completed by March 2023. The Help to Buy ISA closed to new savers in November 2019. Various replacement schemes now exist including Shared Ownership, the First Homes Scheme, the Mortgage Guarantee Scheme, and the Lifetime ISA. See our dedicated Help to Buy and alternatives guide for a comprehensive overview of every current first-time buyer scheme available in 2026.

On an interest-only mortgage, the monthly repayments cover only the interest charged on the outstanding loan balance — none of the capital is repaid through regular payments. At the end of the mortgage term, the full original loan amount remains outstanding and must be repaid in a lump sum via an agreed repayment vehicle such as investments, savings, pension funds, or the sale of the property. Interest-only results in lower monthly repayments than equivalent repayment mortgages, but carries significant risk if the repayment strategy underperforms. Most residential lenders now impose strict eligibility criteria for interest-only including minimum income thresholds, maximum LTV limits, and acceptable repayment vehicles. Interest-only remains more widely available on buy-to-let mortgages. Use our mortgage calculator to compare repayment versus interest-only monthly costs on any loan amount.

A joint mortgage is taken out by two or more people together, most commonly partners buying a home but also available to friends or family members purchasing together. All parties are jointly and severally liable for the full mortgage debt — if one party stops paying, the other or others must cover the entire repayment. Income from all parties is combined for affordability purposes, which is the primary motivation for joint applications. Most lenders accept up to two or four applicants on a joint mortgage. All applicants' credit histories are linked once a financial association exists, which affects both parties' future credit applications. Couples should also consider ownership structure — joint tenancy (equal ownership, passes to survivor on death) or tenants in common (defined shares, can be left to others in a will) — and take legal advice on the implications of each.

Leasehold means you own the right to occupy a property for a fixed period — the lease term — but not the land itself, which is owned by the freeholder. Leasehold is the standard ownership structure for flats in England and Wales, with lease terms typically 99, 125, or 999 years when first granted. As the remaining lease term shortens, the property becomes harder to mortgage (most lenders require at least 70 to 85 years remaining at the end of the mortgage term) and its value may fall. Lease extension is a legal right for qualifying leaseholders, though it can be expensive. Leasehold properties involve ongoing obligations including ground rent on older leases and service charges. Major reforms to leasehold law are ongoing in England and Wales, including legislation making it easier and cheaper to extend leases and purchase the freehold collectively.

Loan to Value is the ratio of your mortgage loan to the value of the property, expressed as a percentage. It is calculated by dividing the mortgage balance by the property value and multiplying by 100. A £180,000 mortgage on a £200,000 property is 90% LTV, meaning the buyer holds a 10% equity stake. LTV is one of the most important metrics in mortgage pricing because it represents the lender's financial risk: the higher the LTV, the less equity buffer and the greater the potential loss if the borrower defaults and the property is sold. Lower LTVs unlock progressively better interest rates, with common pricing thresholds at 60%, 70%, 75%, 80%, 85%, 90%, and 95%. Improving your LTV by saving a larger deposit or through property value growth when remortgaging can significantly reduce your mortgage rate. Use our mortgage calculator to model different LTV scenarios and their impact on monthly repayments.

A Mortgage in Principle (MIP) is a document from a lender confirming how much they would be willing to lend, based on an initial assessment of your financial position. It is also known as an Agreement in Principle (AIP) or Decision in Principle (DIP) — all three terms refer to the same concept. Obtaining a MIP is one of the first practical steps in buying a property, before you begin viewing homes seriously. It gives you a lender-confirmed budget, demonstrates your credibility to sellers and agents, and may identify credit issues early when there is still time to address them. A MIP does not guarantee that the lender will approve your full application — that is subject to a full assessment of your finances, the property valuation, and verification of all information. Most AIPs involve only a soft credit check and are valid for 60 to 90 days.

Negative equity occurs when the outstanding mortgage balance exceeds the current market value of the property. For example, if you purchased a property for £250,000 with a 5% deposit and a £237,500 mortgage, and the property's value subsequently falls to £220,000, you are in negative equity of £17,500. Negative equity makes it very difficult to sell the property without bringing additional funds to clear the shortfall, and it prevents remortgaging with most lenders because the LTV would exceed 100%. Negative equity is most likely to affect buyers who purchased at peak prices with minimal deposits in areas that subsequently saw price falls. The best protection is a larger deposit at purchase, which provides a buffer against property price declines.

An offset mortgage links your mortgage account to one or more savings accounts held with the same lender. Instead of earning interest on your savings, the savings balance offsets your mortgage balance, reducing the amount on which interest is charged. With a £200,000 mortgage and £30,000 in linked savings, you pay interest on £170,000 only — reducing your monthly interest cost without you needing to make additional capital repayments or lock your savings away. You can access your savings at any time. Offset mortgages are particularly tax-efficient for higher and additional rate taxpayers who would otherwise pay income tax on savings interest. They suit those with variable income — freelancers, business owners, those with bonuses — who want mortgage flexibility alongside the financial benefit of overpayment. The interest rate on offset mortgages is typically marginally higher than equivalent standard deals, but the overall cost is often lower for those with substantial savings.

A mortgage overpayment is any payment made above your contractual monthly repayment. Making overpayments reduces the outstanding capital balance, which reduces the total interest paid over the mortgage term and can shorten the loan term significantly. Even modest regular overpayments have a meaningful long-term effect — an extra £100 per month on a £200,000 25-year mortgage could save thousands in total interest and cut years off the term. Most lenders allow overpayments of up to 10% of the outstanding balance per year during an initial deal period without triggering an Early Repayment Charge. If your mortgage is on the SVR, you can typically overpay any amount without penalty. Use our overpayment calculator to calculate precisely what different overpayment amounts will save on your specific mortgage.

A portable mortgage can be transferred from your current property to a new property when you move, allowing you to retain your existing interest rate and deal rather than redeeming the mortgage and facing an Early Repayment Charge. Portability is particularly valuable when you are mid-way through a fixed rate deal with a significant ERC. However, portability is never automatic — the lender must approve the new property as suitable security and re-assess your affordability based on your current financial position. If you need to borrow more for the new property, the additional amount will be at a new rate. Not all mortgages are portable, so if you anticipate moving before your initial deal ends, confirm portability availability when selecting your mortgage product.

Remortgaging is the process of switching your existing mortgage to a new deal, either with your current lender (known as a product transfer) or with a new lender entirely. Reasons to remortgage include securing a better interest rate when your current deal ends (avoiding reversion to the higher SVR), releasing equity from your property to fund home improvements or other expenditure, consolidating other debts into the mortgage, changing the mortgage type, or altering the term. Remortgaging to a new lender involves a new application, affordability assessment, property valuation, and some legal work, and typically takes four to eight weeks. Start exploring options three to six months before your current deal expires to avoid spending time on the SVR. Use our mortgage calculator to model potential savings from remortgaging to a lower rate.

A repayment mortgage, also called a capital and interest mortgage, is the standard type where each monthly payment covers both the interest charged on the outstanding balance and a portion of the capital itself. Over the full mortgage term, the entire loan is repaid through regular payments and at the end the mortgage is fully cleared — you own the property outright. In the early years, the majority of each payment covers interest and only a small portion reduces the capital; as the balance falls, more of each payment goes towards repaying the loan. Repayment mortgages build equity steadily and carry far less end-of-term risk than interest-only mortgages. They are the overwhelmingly most common type of residential mortgage in the UK and are the right choice for most owner-occupiers.

A service charge is a payment made by leasehold property owners to the freeholder or management company to cover the costs of maintaining and managing the building and shared areas. Service charges cover items such as buildings insurance, cleaning of communal areas, lift maintenance, gardening, building management fees, and contributions to a sinking fund for future major works. They can vary significantly — from a few hundred pounds per year for a simple block to several thousand in large developments with extensive facilities. Before buying a leasehold property, ask your solicitor to review at least three years of service charge accounts, identify any planned major works, and check the adequacy of the sinking fund. High or rising service charges affect both affordability and resale value significantly.

Shared Ownership is a government-backed scheme allowing buyers to purchase a share of a property — typically between 10% and 75% — with a mortgage and pay subsidised rent on the remaining share to a housing association. A mortgage is required for the share being purchased, making the deposit and monthly mortgage repayment significantly lower than for outright purchase. Buyers can increase their ownership stake over time through a process called staircasing — purchasing additional increments at the current market value. Shared Ownership properties are always leasehold and typically new-build. Service charges, ground rent on older leases, and rent on the unowned share are all ongoing costs alongside the mortgage. Eligibility includes a household income limit of £80,000 per year (£90,000 in London) and a requirement that you do not currently own a home. See our Help to Buy and alternatives guide for full details on Shared Ownership.

Stamp Duty Land Tax is the tax paid to HMRC on the purchase of land or property in England and Northern Ireland above certain value thresholds. SDLT is tiered — different percentages apply to different portions of the purchase price. First-time buyers benefit from enhanced relief, paying no SDLT on the first £300,000 of a purchase costing up to £500,000 as of 2025 onwards (buyers should verify current thresholds as these changed in April 2025). Additional property purchases attract a surcharge above the standard rates. SDLT must be paid within 14 days of completion. Scotland uses Land and Buildings Transaction Tax and Wales uses Land Transaction Tax with different rates and thresholds. Use our stamp duty calculator to calculate your exact liability for any property price and buyer status.

The Standard Variable Rate is a lender's default mortgage interest rate that applies automatically when a borrower's initial deal period — fixed rate, tracker, or discount — ends, unless the borrower actively remortgages to a new product. Each lender sets its own SVR independently; it is not directly tied to the Bank of England base rate, though lenders typically adjust it when the base rate changes significantly. SVRs are almost always substantially higher than the rates available on new mortgage deals — often by 2 to 4 percentage points — meaning borrowers who drift onto the SVR are paying significantly more than necessary. There are no Early Repayment Charges on the SVR, so you can switch to a new deal or remortgage to a different lender at any time. If you are currently on your lender's SVR, reviewing your remortgage options should be an immediate priority.

A tracker mortgage has an interest rate that is linked to an external reference rate — almost always the Bank of England base rate — and moves automatically when that reference rate changes. The rate is expressed as the base rate plus a fixed margin: for example, "base rate + 0.75%" means if the base rate is 4.75%, your mortgage rate is 5.5%. If the base rate rises by 0.25%, your mortgage rate and monthly repayment increase by exactly the same amount automatically. Tracker mortgages offer the potential for lower repayments if rates fall, but payment uncertainty if rates rise. Some tracker mortgages have no Early Repayment Charges (particularly lifetime trackers), making them ideal for those wanting maximum flexibility. Learn more about all mortgage types at our mortgage types guide.

Underwriting is the process by which a lender's team assesses a mortgage application in detail to decide whether to lend, on what terms, and at what rate. The underwriter reviews the borrower's income and employment documentation, bank statements, credit history, the property valuation report, and all other submitted information. Automated underwriting handles most straightforward applications efficiently, but more complex cases — involving self-employment, unusual income, credit issues, or non-standard properties — are typically referred to a human underwriter for manual review. The underwriting process results in a formal mortgage offer, a request for additional information, or a decline. Experienced mortgage brokers understand individual lenders' underwriting criteria in depth, which is why they can often secure approvals that lenders have declined when approached directly.

A mortgage valuation is an inspection carried out on behalf of the lender to confirm that the property is worth at least the agreed purchase price and is suitable security for the mortgage. It is not a detailed condition survey — it is a high-level assessment designed to protect the lender's financial interest, not the buyer's. Most lenders charge a valuation fee, though some include it as part of their mortgage product offer. The valuation report belongs to the lender and may not be shared in full with the buyer. Buyers must not rely on the mortgage valuation as assurance about the property's structural integrity or the absence of defects. A separate homebuyer survey (Level 2) or full structural survey (Level 3) should always be commissioned independently by the buyer for their own protection before exchange of contracts.

A variable rate mortgage is any product where the interest rate can change during the loan term, as opposed to a fixed rate where it is locked for a set period. Variable rate products include tracker mortgages (linked to the base rate and moving with it), standard variable rate mortgages (the lender's default rate), discount rate mortgages (a set percentage below the lender's SVR), and capped rate mortgages (variable but with a ceiling). Variable rate mortgages carry more risk than fixed rates because monthly repayments can rise if rates increase, but they also offer potential savings if rates fall and often provide greater flexibility — including the ability to overpay freely or exit without Early Repayment Charges. The right choice between fixed and variable depends on your financial resilience, your view on future rate movements, and your need for flexibility. Visit our mortgage types guide for a detailed comparison of all available products.