Annual Percentage Rate. This compares the cost of capital and takes into account most of the up-front and ongoing costs involved in a mortgage. It allows the consumer to compare the true costs of loans from different lenders. It is a legal requirement to quote APR figures for both mortgage and personal loan quotations.

Your monthly payments are partly to pay the interest on the amount you borrowed and partly to repay the outstanding mortgage. A capital and interest mortgage is otherwise known as a repayment mortgage.

An interest rate charged for a set period of months or years which can go up and down with the variable rate, but there is a maximum (capped) interest which it cannot go above.

A payment you receive when you take out a mortgage. It may be a fixed amount, or a percentage of the amount of the mortgage.

County Court Judgment. A decision reached in the County Court which can be for not paying debts. If you pay off the debt, the CCJ is satisfied and a note is put on your records to say this.

A lender's way of assessing whether you are a good risk to lend a mortgage to, using the answers you give on a loan application form. This means it is important that all questions on the form are answered.

A check the lender makes with a specialist company such as Equifax, CCN or Westcott Data to find out whether you have any CCJs or a bad credit record.

A guaranteed reduction in the standard variable mortgage rate. This often lasts for an agreed period such as 2 or 3 years. It is often followed by a further tie-in period during which you cannot change your mortgage provider without a financial penalty.

The amount of value in a property that isn't covered by a mortgage - simply take the amount of the mortgage from the valuation to work out the equity.

Where the buyer and seller of a property sign and swap identical contracts that show the price and what fixtures and fitting are being sold, as well as the finalised date. When contracts are exchanged the deal becomes legally binding and if either party pull out before completion, they have to pay compensation.

The interest charged on the mortgage is for a set amount for an agreed period of months or years. Common fixed rate periods are 3 and 5 five years.

A type of mortgage where you can make extra payments and even underpayments without paying a charge or penalty.

This is where you own the property and the land it is on.

A fee that a leaseholder has to pay the freeholder every year.

The size of mortgage that lenders will offer will often be worked out by multiplying your income each year by a set figure. If you are the only person taking out the mortgage, the usual maximum income multiple is three times your yearly income. If you are taking out a mortgage with someone else, the multipliers might be three times the main income plus two times the second income. Or it could be two and a half times the two combined incomes. Lenders may consider including all or part of any regular bonuses or commission you receive.

This covers accident,sickness and unemployment. It provides a monthly payment if you cannot work for an extended period due to an accident,sickness or unemployment.

Loan to value. This is the size of the mortgage as a percentage of the value of the property or the price you are paying for the property.

A loan to buy a property where you put up the property as security against you paying back the loan.

Mortgage Repayment Protection. This is insurance you take through the lender when you take out the loan.

Where the money you owe on the mortgage is greater than the value of the property. It happens when there are large property price falls after a boom period.

The lender does not need employment or income references from you. This type of loan is often offered to self-employed people.

This is changing your mortgage without moving house.

Your monthly payments are partly to pay the interest on the amount you borrowed and partly to pay the outstanding mortgage.

You confirm how much you earn, and the lender does not need any references.

This is the most wide ranging check of the outside and inside of a property. This is carried out by professional surveyor and it should pick up all but the most hidden faults.

Standard variable rate. The interest rate the lender charges goes up and down, with your interest payments changing accordingly.

The period of years over which you take the mortgage and when you have to repay it.

As a condition of a special mortgage deal, you may have to agree to stay with the lender for a period of months or years after the deal has ended. If you move your mortgage elsewhere during this period, you may have to pay an early redemption charge.

An simple inspection carried out for the benefit of the mortgage lender to verify that the property forms good security for a loan. This is a limited form of inspection. Purchasers may decide to request a full structural survey before proceeding.

The interest rate the lender charges goes up and down as the Bank of England rate varies, and your interest payments change accordingly.