Glossary

A | C | E | F | G | I | L | O | P | R | S | T

A

APRC - Annual Percentage Rate of Charge

The APRC is the amount of interest applied to a mortgage product on an annual basis. It takes in to account all additional expenses and discounts, along with the how much time is left on the mortgage term, to give you a full average cost of borrowing per year.

Arrears

An account is defined as being in arrears when the due date has passed and payment for that month has not been made.

Arrears Fees

These are fees that are charged when an account is in arrears. Any charges applied will be added to your mortgage account and interest will be charged on them.


C

Capital & interest mortgage

See Repayment (capital and interest) mortgage.


E

Early Repayment Charges

Paying back your loan early or overpaying may mean you’ll have to pay an early repayment charge. The amount you’ll be charged depends on the terms and conditions of your product.


F

Fixed Rate Mortgage

A fixed rate mortgage provides the security of fixed mortgage repayments until the end of the deal period, no matter what happens to interest rates. Once the deal period has finished you will automatically be put on the TMW Managed Rate unless you choose a new Fixed or Tracker deal at that time.

Flexible Features

With our fixed rate and tracker mortgages you can overpay part of your capital balance in each 12 month period (from the date your product started), without incurring any early repayment charges. To find out more about your overpayment allowance, check your Mortgage Offer.

Further Advance

A Further Advance is an additional loan using your property as security (sometimes referred to as a second mortgage or additional borrowing). 

Full Liability

Full Liability is where the guarantor guarantees (agrees to pay it should the main borrower be unable) the full amount of the loan.


G

Guarantor Mortgage

With a guarantor mortgage a close relative agrees to act as guarantor for all or part of the mortgage amount. The guarantor must be able to prove that they can afford to cover the mortgage loan in the event that the borrower is unable to keep up with the monthly payments.


I

Interest only mortgage

With interest only mortgages, your monthly payments only cover the interest on the amount you owe (so you're not reducing the outstanding sum each month). The idea is to put the money that you would have spent repaying your mortgage into an endowment or ISA policy as a repayment vehicle. If the sale of the property covers the outstanding mortgages and charges it is acceptable as a repayment method.

Interest Rate

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


L

Limited Liability

Limited Liability is where only a fixed proportion of the loan is guaranteed by a Guarantor (usually a close relative) up to a maximum of 30% plus an additional 10%. This means the guarantor agrees to pay a percentage of the loan should the main borrower be unable.

Loan to Value (LTV)

The loan to value represents the amount you are looking to borrow (or the remaining amount of your existing mortgage) as a percentage of the value of the property. For example, if a property is valued at £100,000 and you have a £80,000 loan, the LTV is 80% (80,000/100,000 x 100 = 80%) with your deposit equaling 20% of the total value of the property.

Let to Buy

A let to buy mortgage allows you to borrow money to buy a new property to live in while you let your existing property out to tenants.


O

Overpayments

This is when you pay more than your required minimum monthly payment and build up an overpayment reserve. This enables you to pay off your mortgage earlier (conditions apply). See Flexible Features for more information.


P

Part and part mortgage

Part and part mortgage deals allow you to combine elements of both repayment and interest only mortgage deals.

Porting

Porting is the practice of keeping the same mortgage when you sell your old property and buy a new one.

Property Valuation

Since no two properties are alike a valuer has to perform a Property Valuation to access each property individually and arrive at a proposed value, usually called its Market Value. A fee is usually charged for this service.


R

Redemption Charge

If you enter into a new mortgage with TMW Direct and subsequently repay your mortgage in full, you will pay a charge (currently £145) unless you are taking a new mortgage with us at the same time.

Remortgage

When a person transfers their mortgage from another lender.

Rental Income

Rental income is the amount of rent you expect to generate from a property.

Repayment (capital & interest) mortgage

With a Repayment (capital and interest) mortgage you repay both the interest and a small percentage of the borrowed capital each month. That means that your mortgage will be paid off in full (if you continue to meet your payments) at the end of the mortgage term.


S

Second charge

A second mortgage secured on your property with another lender. A second charge is secondary to your main loan so when the property is sold, the main lender will be repaid first.


Switching

When a customer comes off one mortgage deal and moves to a new mortgage deal with the same lender.


T

The Mortgage Works Managed Rate

If you are not part of The Mortgage Works Fixed or Tracker deals then you are on our Managed Rate which is a variable rate. The Mortgage Works Managed Rate is not subject to any upper limit or cap and is not tied to the Bank of England base rate.

Tracker Rate Mortgage

With a tracker mortgage, the interest rate you are charged tracks the Bank of England's (BoE) base rate up and down by an agreed percentage. Thus your payments will go up and down in line with the rate changes, there is no tracker floor. Once the deal period has finished you will automatically be put on the TMW Managed Rate unless you choose a new Fixed or Tracker deal at that time.