Mortgage Jargon Buster and Mortgage Dictionary

 

Jargon buster

Introduction

Start typing some terms in our Smart search function or simply scroll down to browse through the expandable list of items in our jargon buster.

Show all details

Show all details

  • Additional Borrowing

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

  • Annual Percentage Rate (APR)

    APR stands for the Annual Percentage Rate of charge used to compare loan offers.

  • Arrangement Fee

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

  • Bank of England Base Rate

    The Bank of England Base Rate is set by the Bank of England. HSBC Tracker mortgage interest rates are linked with a margin above this Base Rate

  • Booking Fee

    A non-refundable fee charged on some mortgages to secure a particular mortgage deal.

  • Capital and Interest Repayment

    Your monthly payment covers the interest and also reduces the total balance outstanding.

  • Completion Fee

    A fee to cover the cost of electronically transferring the mortgage funds to the borrower.

  • Deposit amount

    The value of funds that you are using to purchase the home.

  • Discount Rate Mortgage

    The mortgage interest rate is discounted from the HSBC Variable Rate. When the discount period ends, the mortgage interest rate reverts to the HSBC Variable Rate.

  • Early Repayment Charges

    An Early Repayment Charge (ERC) is a charge you may have to pay if you repay the whole or part of your mortgage, by paying it back early (which includes if you move to a different product or move to a different lender) during a certain period. Early repayment charges do not apply to tracker mortgages.

  • Estimated property value

    The purchase price or the conservative market value of the property being used as security.

  • Equity

    The monetary difference between a property's actual value and the mortgage held against the property.

  • Existing HSBC Mortgage Customer

    A person who holds an HSBC Bank residential mortgage.

  • Existing Customer Switching

    A person who holds an HSBC Bank mortgage moving to another deal e.g. from a tracker rate to a fixed rate.

  • Existing Customer Borrowing More

    A person who holds an HSBC Bank mortgage seeking to borrow more using their home as security.

  • Exit Fee

    This is a closure administration fee payable to service providers when you fully repay your mortgage. HSBC Bank does not charge an exit fee.

  • Extended Tie in Period

    Some lenders stipulate that the borrower keeps 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.

  • Fee Saver

    Fee Saver means no booking fee, no completion fee. We will cover the cost of one standard valuation fee. Other fees and charges may apply including, but not limited to, legal fees, you may also be liable for any charges levied by your current lender.

  • First Time Buyer

    A person buying their first property.

  • Fixed Rate Mortgage

    A fixed rate mortgage provides the security of fixed mortgage repayments until an agreed date, no matter what happens to interest rates.

  • Fixed Until

    The date at which a fixed rate mortgage will expire.

  • Home Mover

    A person selling one property and purchasing another property.

  • HSBC Buy to let variable mortgage rate

    You must hold or open an HSBC Premier Bank Account and meet our HSBC Premier eligibility criteria. Find out more.

  • HSBC Variable Rate

    The HSBC Variable Rate will vary over the term of the loan and is a Variable Rate set internally by HSBC. The HSBC Variable Rate does not track the Bank of England Base Rate.

  • Interest Calculated Daily

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

  • Interest Only

    The monthly payment covers just the interest and the original capital amount borrowed remains outstanding throughout the term of the loan

  • Interest Rate

    This is the percentage rate at which the lender calculates the interest they charge the borrower for the mortgage.

  • Interest Type

    Interest payable may be variable or fixed (a certain rate fixed for a given term set by the lender).

  • KFI (Key Facts Illustration)

    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.

  • Loan to Value (LTV)

    The loan to value represents the percentage of the value of the property which the borrower is seeking to borrow. E.g. a £100K property with an £80K mortgage = an 80% LTV.

    The maximum LTV we will lend will depend on your individual situation, the property, the loan you choose and the amount you borrow.

  • Lump Sum Payment

    When a customer makes a one-off payment to reduce the outstanding balance on their mortgage.

  • Monthly Repayment

    This is an estimate of the monthly repayments at the current stated interest rate.

  • Mortgage Term

    The length of time over which a mortgage is taken.

  • New Build Property

    A New Build Property is defined as:

    • a building that has been built in the last 24 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 an HSBC recognised satisfactory Structural Defects Warranty.

    We may lend up to a maximum of 85% Loan to Value (LTV) on New Build Properties. Customers with an LTV greater than 75% are required to have a minimum deposit of £25,000.


  • Outstanding Balance

    The outstanding amount owed to a lender under an existing mortgage.

  • Overall Cost for Comparison / Annual Percentage Rate (APR)

    APR stands for the Annual Percentage Rate of charge used to compare loan offers.

  • Overpayment

    An overpayment occurs when a borrower chooses to make a larger monthly repayment on their mortgage than is stipulated under the mortgage terms.

  • Porting

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

  • Rate period (buy to let)

    The period during which the fixed or tracker rate applies. Following the expiry of the fixed rate period, the mortgage rate will revert to the HSBC Buy to let mortgage Variable Rate.

  • Rate period (residential)

    The period during which the fixed, tracker or discounted rate applies. Following the expiry of the fixed or discounted rate period, the mortgage rate will revert to the HSBC Variable Rate.

  • Remortgage

    When a person transfers their mortgage from another lender.

  • Service Fee

    The fee charged by a lender who, with the customer's written consent, requests details from their existing mortgage lender.

  • Standard Valuation Report

    This report is solely for the purpose of arriving at a current market value to enable the lender to determine the amount of the advance. It should not be relied on by the customer to assess the suitability or saleability of the property.

  • 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 tracker rate mortgage.

  • Tracker Rate Mortgage

    The mortgage interest rate is set at a fixed percentage above the Bank of England (BoE) base rate. The interest rate payable will rise and fall in line with changes to the BoE base rate.

home sweet home picture

Your home may be repossessed if you do not keep up repayments on your mortgage.

Need to talk to us?

Our mortgage specialists are here to help.

Call us:
0800 169 6333

Textphone: 1800 10800 028 0126

Come and see us

If you would like a face-to-face chat, just pop in to a branch.

Find a branch

† Lines are open 8am – 10pm everyday. Calls may be monitored and recorded.