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Mortgage Glossary

Mortgage Glossary

Welcome to our Mortgage Glossary. Here you will find definitions for more commonly used mortgage terms, making the jargon clearer. If you're unsure of any words or phrases, simply use the guide below.

Higher Lending Charge

A Higher Lending Charge (HLC) is paid where a mortgage is over a set loan to value (LTV). This protects the lender in event that the borrower defaults on the mortgage. At Newbury Building Society we do not usually charge borrowers this fee.

HomeBuyers Report

A HomeBuyers Report is a detailed alternative to a mortgage valuation that will give you a more comprehensive guide to the condition of your property.

Home Mover

A home mover is someone selling one property and purchasing another.

Help to Buy - Equity Loan

This scheme enables purchasers to buy a property (which is eligible for Help to Buy) worth up to £600,000 in England, Scotland and Wales. You will need a 5% deposit and can borrow up to 20% of the value of the property from the Government as an interest-free loan for the first 5 years. You will need to raise a 75% mortgage to cover the remaining cost of the home.

How it works

  • You’ll need to contribute at least 5% of the property price as a deposit
  • The government will give you a loan for up to 20% of the price
  • You’ll need a mortgage of up to 75% to cover the rest.

Example

For a property worth £200,000

Amount

Percentage

Cash deposit

£10,000

5%

Equity loan

£40,000

20%

Your mortgage

£150,000

75%

The equity loan is interest free for the first five years, but in the 6th year of ownership, a fee of 1.75% of the market value of your property at the time your purchased is applicable, rising annually by the increase (if any) in the Retail Price Index (RPI) plus 1%. This is applicable if you have not paid back your equity loan by the end of year 5. You won’t be able to sub-let your home if you use this scheme. It must also be your only property.

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Newbury Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number 206077). Registered office: Newbury Building Society, 17 Bartholomew Street, Newbury, Berkshire, RG14 5LY.

English law applies and we will communicate with you in English. We are participants of the Financial Ombudsman Service. We have a complaints procedure which we will provide on request. Most complaints that we cannot resolve can be referred to the Financial Ombudsman Service.

You can check the Financial Services register on the FCA's website.

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