Secured Loans & Mortgages

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Payment cap
A legal limit on the amount a monthly payment can increase on an adjustable rate mortgage.

Payment default
This results when you are unable or simply unwilling to meet your mortgage repayments. If you default on your payments, the lender is ultimately entitled to sell your home in order to recover the loan. Different lenders will have different policies on how long they give you before they start the legal proceedings to recover the loan. Many will have a separate schedule of charges which you will incur before they start proceedings.

Payment holiday
A short break from regular mortgage repayments, sometimes offered with flexible mortgages. This can sometimes be a useful feature for self-employed people or others with irregular income.

Pension mortgage
A type of interest-only mortgage where your mortgage payments are combined with payments into your personal pension fund. This is designed to mature on your retirement, so the mortgage loan term must end between the ages of 50 and 75 unless the borrower is in an industry where the Inland Revenue permits earlier retirement. The pension also needs to provide you with an income during retirement, so only twenty five percent of the pension fund can be taken as a lump sum to pay of your mortgage.

Policy excess
The amount you will have to pay when you make a claim. For example, this may be the first £100 of a £1000 claim for damage caused by a fire.

Portable mortgage
The mortgage can be transferred from one property to another without incurring penalties.

Prime rate
The best interest rate available to a lender's most qualified customers.

Private sale
The sale of a property without the use of an estate agent.

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