What jargon should I know?

Our straightforward glossary provides guidance on some common words and phrases that you’ll encounter when arranging your mortgage.

APRC or Annual Percentage Rate - The Annual Percentage Rate (APRC) is the yearly cost of your mortgage and includes interest, one-off fees plus on-going costs. The APRC is the way you should compare the cost of different loans on a ‘like-for-like’ basis.

Benefit period - This is the length of time that a discounted, fixed, or capped rate applies to a mortgage. For example, a mortgage with a two-year fixed rate would have a benefit period of two years.

Capital - Any sum of money that we may lend to you - ordinarily to purchase a property or on a remortgage transaction to repay another lender. Interest will be payable on capital from the date the funds are released by the Society.

Completion - The final stage of the conveyancing process after exchange of contacts - when keys change hands (on a sale or purchase) and your mortgage with the Society is set up.

Completion fee - This is a one-off fee payable towards the set up costs of some mortgages and is not refundable, even if the mortgage does not complete.

Conveyancing - Conveyancing is the legal process necessary wherever property or land is bought or sold.

Early Repayment Charge - Many products are offered with highly competitive incentives at the start of a mortgage term. Such products can only be offered on the assumption that you keep your mortgage with the Society for a fixed period of time. In such circumstances, although you are of course free to move house and/or remortgage at any time, an early repayment charge will be incurred if you repay (or in some cases, partly repay) the Capital within the Early Repayment Period.

Early Repayment Period - This is the period of time during which an Early Repayment Charge may be payable. If applicable to the product chosen, full details will be set out in any mortgage offer made by the Society.

Exchange of contracts - This is the process where both parties formally agree to the sale/purchase of a property and set a completion date.

Gibraltar Variable Rate – The Society’s own base lending rate. Mortgages which start at concessionary rates will usually revert to the Gibraltar Variable Rate after the Benefit Period.

Illustration - The Financial Conduct Authority have designed a Key Facts Illustration to ensure that you receive consistent illustrations, with content shown the same way, from all mortgage lenders, allowing them to compare like with like.

You must have personalised product information, in the form of a Illustration, at an early stage in the buying process, to ensure an easy comparison of different products. It also ensures you receive the information you need to decide whether to apply for a particular mortgage.

LTV or Loan to Value - Often referred to as LTV, Loan to Value is a percentage figure used to express the amount of the loan as a proportion of the property’s value. Different mortgage products can have different maximum LTV’s - meaning that the minimum amount of deposit required (when buying a new home) can vary from one type of product to the next.

Local search – Comprises a request for a variety of information from the relevant local authority, including information on planning matters and the maintenance of roads in the vicinity of a property. Local Searches will usually be carried out by your legal representative and can take several weeks to complete.

Mortgage – A familiar term but still worth defining. A mortgage is a legal charge on property used to secure a loan. The mortgage will remain in place until Redemption.

Mortgage advisor – A Mortgage Advisor is a mortgage specialist who will help you in arranging your mortgage. You can contact a Mortgage Advisor by visiting your local Gibraltar branch, or calling us.

Mortgage term – This is simply the number of years over which it is anticipated a mortgage will remain in place.

Premium – The payment for an insurance or endowment policy, which can be made either by a single payment or regular instalments.

Product Fee - This is a one off fee payable on application for a mortgage. It’s normally refundable if the mortgage does not complete.

Redemption – Repayment of a mortgage in full, including interest and costs.

References – The checks which a lender makes before making a formal mortgage offer. These might include asking your employer to confirm your income, as well contacting credit reference agencies.

Remortgage – This is the process of changing from one lender to another – moving your mortgage but not your home.

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