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Saving money on your mortgage
How to save money on your mortgage
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Founder of the Young Money Blog and author of Spare Change. Iona is also a freelance journalist and public speaker.Meet all the mentors
Buying a home is complicated enough without being baffled by the complicated terms involved. That’s why we’ve compiled easy-to-understand descriptions of a few of the more technical terms below.
- Arrangement fee (also known as product fee)
A fee charged as part of the overall cost of your mortgage. Most mortgage lenders will allow you to add this fee to the loan, but this will mean you pay interest on it for the whole mortgage term.
APRC stands for Annual Percentage Rate of Charge. When buying a home, the APRC is the total cost of your mortgage loan over its lifetime, so you can compare this like for like with other mortgages.
- Building insurance
Cover to rebuild if your home is damaged or destroyed. You must insure your new property when you exchange contracts, and most mortgage lenders will insist you have the appropriate cover in place.
In a nutshell: buying a property to let it out to others.
- Completion date
The date you own your new home. Time to crack open the bubbly.
- Contents insurance
Cover for belongings within your home. You know those prize possessions? Yeah, best get them insured.
Legal documents helping to define the ownership and boundary of property and land.
Money initially put down by a buyer when purchasing a property.
- Exchange of contracts
When buying or selling a house, both parties are legally obliged to complete once contracts are exchanged. Financial penalties are often incurred for breaking the deal.
IFA stands for independent financial adviser.
- Mortgage offer
A formal written offer from a bank or building society to lend you money to buy the property.
Porting is when you move your existing mortgage to a new property. As this is done with your existing mortgage provider, it should – in theory – allow you to save some fees and charges associated with applying for a mortgage, or ending your current deal early. But not all mortgages are portable so it’s best to check with your provider.
- Stamp duty
Tax paid to the government when you buy a property.
Everyone needs help from time to time and so you may find these links handy.
Money Advice Service
Help with renting, buying a home and choosing the right mortgage.
Information on the government’s Help to Buy Schemes – helping you take the next steps to become a home owner or move up the property ladder.
A free valuation tool which aims to give you an idea of how much your property is currently worth.
Money Saving Expert
A useful overpayment calculator showing how overpaying your mortgage could reduce your mortgage term.
National Landlords Association
Offers help, advice and online courses about renting your property.
Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.