Helping you make sense of all the jargon

Johnson Brooks will provide comprehensive mortgage advice in plain English and are here to provide answers to all your questions. However, these are some of the more frequently used terms you may come across:

Mortgage
a loan ‘secured’ against a property. It’s important to keep up repayments on the mortgage as otherwise, you could lose your property.

Mortgage Term
The length of time you have to repay your mortgage

Green and orange frog holding a laptopRepayment Mortgage
Your monthly mortgage payments go towards reducing the amount you owe as well as paying interest. This means that each month you’re paying off a small part of your mortgage.

Interest only Mortgage
Your monthly mortgage payment is interest only and nothing is paid towards reducing the amount borrowed. You need to have a separate repayment strategy in place to repay the mortgage, for example, savings or investments. These mortgages are not available to everyone.

Standard Variable rate (SVR)
This is a standard interest rate that can go up or down in line with market rates. Whilst this type of mortgage offers flexibility, your payment can go up or down making it harder to budget.

Discounted rate
Some mortgages start with an initial interest rate set lower than the SVR for a set period of time. At the end of this period, the lender will change the interest rate to the SVR. Your monthly mortgage payments can go up or down.

Tracker Mortgage
The interest rate charged by a lender is linked to a rate such as the Bank of England base rate. This means your payments may go up or down.

Green and orange frog holding a magnifying glassOffset Mortgage
If you have savings you may be able to ‘offset’ these against the mortgage to pay less interest. Your savings and mortgage need to be with the same provider and any linked savings accounts will not attract interest.

Fixed rate Mortgages
Your monthly mortgage payment stays the same for a set period. When the set period ends your lender will usually change your payment to an SVR which means your payments could go up or down.

Early Redemption Charge (ERC)
A charge that may be payable if you pay off the mortgage within a set period

Mortgage Valuation
A brief inspection of the property for the lender which should not be relied upon as a survey