Advance (mortgage advance)
This is any sum of money which we lend to you under the Mortgage Deed.

Annual Equivalent Rate (AER)
This is a notional rate for savers which illustrates what the gross interest rate would be if interest was paid and added to the account annually. AERs on an account which pays monthly interest assumes interest is added to the account at the end of each month during the year.

Annual Percentage Rate (APR)
This is the total cost of the loan in terms of a yearly percentage of the amount you borrow. It takes into account interest payments, repayments of capital and all other charges for arranging the loan. It is based on projections for the payments applicable during the term of a mortgage expressed as a rate of interest. It allows you to compare like with like when weighing up offers from different lenders. 
 
Application Fee
For some types of mortgage we will ask you to pay an application fee before your mortgage can be considered. The fee is non refundable.

Bank of England base rate
This is the interest rate set by the Bank of England, also known as the 'repo' rate.

Building Society
A mutual savings and loan institution. The principal purpose is to create loans secured on residential land, funded by savings of members and depositors.

Buildings insurance
When you take a mortgage with us, we require that you have insurance cover for the property mortgaged. The insurance provided will cover the fabric of the building including certain fixtures and fittings.

Buildings survey
A detailed technical examination of a property. It may include tests on services and, opening up small sections of the floor and other concealed areas in order to check otherwise inaccessible parts of the property. The report will give advice on the repairs, but it does not normally include a valuation.

Buy to Let
Buy to Let is a form of residential investment where you buy a property and rent it out.

Buy to Let Mortgage
A Buy to Let Mortgage is a mortgage specially designed for people who want to invest in the property market by purchasing one or more properties to let out.
 

Cambridge Variable Mortgage
Our Cambridge Variable Mortgage offers a more flexible way of repaying your loan, including the ability to make overpayments when you want. You can use your overpayments to reduce the term of the loan or ask for overpayments to be refunded at a later date. Alternatively, you can use your overpayments to fund a payment holiday (we use your overpayments to fund the capital payments you would normally make and to cover the interest charged during the payment holiday).

Capital repayment
Is a lump sum payment made to a mortgage account in addition to the agreed Monthly Payment.

Child Trust Fund
The Child Trust Fund is a savings and investment account introduced by the Government which aims to give all children born on or after 1st September 2002 some form of savings for when they reach 18. There are two types of Child Trust Fund, the Cash Child Trust Fund and the Equity Stakeholder Child Trust Fund.

Conveyance
A method of the transfer of property ownership.
 

Daily interest for Mortgage Accounts
This means that we calculate interest on the balance outstanding on the account at the end of each day. The interest is then added to your loan the following day. So every time you make a payment, reducing the balance of your account, the daily interest charge is reduced the following day.

Daily interest for Savings Accounts
We calculate interest on the balance of your account at the end of each day. You earn interest from the day you pay funds into your account in cash, by cheque or transfer, until the day before you withdraw your funds.

Discount Rate for Mortgage Products
An agreed reduction to our Variable Home Loan Rate.
 

Early Repayment Charge

An Early Repayment Charge is a fee you have to pay if a loan is repaid or transferred to any of our other mortgage deals in the early years. Such a fee is usually associated with special discounts, tracker and fixed interest rate loans.

Fixed Rate
A Fixed Rate Mortgage means that the interest rate is set for an agreed period of time (the Fixed Rate term). During this term the rate will not change. So it will not go up or down. This will help you to budget your monthly outgoings.

Flexible Mortgage
Our Flexible Mortgage offers a more flexible way of repaying your loan, including the ability to make overpayments when you want. You can use your overpayments to reduce the term of the loan or ask for overpayments to be refunded at a later date. Alternatively, you can use your overpayments to fund a payment holiday (we use your overpayments to fund the capital payments you would normally make and to cover the interest charged during the payment holiday).

Further advance
Is any sum of money lent by us as additional borrowing after the original loan.

 

Gross interest for savings accounts
The Gross rate is the contractual rate of interest payable before deduction of income tax at the rate specified by law (currently 20%).

Guarantor
Is any person who has agreed to guarantee your mortgage responsibilities.

Higher Lending Charge
A 'higher lending charge' is a fee to cover the cost of purchasing a mortgage indemnity insurance policy. We do not charge our borrowers for the cost of purchasing this cover.

Homebuyers report
A report by a surveyor or similarly qualified person on the condition of a property which is being considered for purchase. This service is less thorough than a building survey but provides reasonable detailed information at a slightly higher outlay than a basic valuation.

Income multiple
The factor by which lenders will multiply the gross annual salary of mortgage applicants in order to determine the maximum borrowing capability. In practice, lenders will also take into account other outgoings the mortgage applicants may have.

Interest only mortgage
With this type of mortgage the capital amount of your loan remains as a standing debt to us until the end of the term of your mortgage and is then repaid, by you, in full. You pay interest only on the loan during the term of the mortgage.

If you choose this method, it is your responsibility to ensure that you have also arranged an appropriate repayment plan to repay the outstanding debt, in full, at the end of the agreed term. You must check your investment plan regularly to see that it is on target to repay the amount of your mortgage. You must also ensure that payments for endowment or pension policies and other investment plans are kept up to date and continue to provide you with the level of cover required. Failure to provide for the repayment of the loan, at the end of the term, will result in your total loan being in arrears and we may take action against you.

ISA
The Government’s tax-efficient savings scheme the ‘Individual Savings Account’ or ‘ISA’, offers a range of savings options: cash savings, stocks and shares and insurance policies.

 

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Loan to Value
The loan to value (LTV) is the amount of the loan required as a percentage of the property's value.

Mortgage
Is the entire legal document under which we lend you money.

Mortgagee
The lender.

Mortgagor
The borrower.

Mortgage Exit Administration Fee
If you redeem your mortgage before completing the full term of the loan we may charge a mortgage exit administration fee. If you remortgage with us and your new loan completes on the same day as redeeming your current loan with us, this fee will be waived.

Mortgage Indemnity Insurance
Mortgage indemnity insurance provides the Society extra security to enable us, in certain cases, to lend above our normal limit for home loans.

This insurance is for our sole benefit. You will not be asked to pay a higher lending charge to cover the cost of arranging the policy. It will not, however, protect you if your property is subsequently taken into possession and sold for less than the amount you owe.

You will remain liable to pay all sums owing including arrears, interest and our legal fees. If a claim is paid to us under this insurance, the insurer has the right to recover this amount from you.

Mortgage deed
Is the legal document you sign to give us security over the property.

Mortgage term
Is the period of time (usually up to 25 years) during which you agree to repay the loan to us.

 

Net Rate for savings accounts
The Net rate is the rate paid after income tax has been deducted (currently 20%).

Overpayments
With a Cambridge Flexible Mortgage, you can make extra payments when you like: reducing your balance quicker so that you pay your loan off early.

Payment holiday
With a Cambridge Flexible Mortgage you can let your overpayments build up and use them at a later date to fund a ‘payment holiday’ for up to 12 months. During the payment holiday we use your overpayments to fund the capital payments you would normally make and to cover the interest charged during the payment holiday.

Portable mortgage
Where the terms and conditions of a mortgage product can be transferred to a new property.
 

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Redemption
The act of paying off a loan.

Repayment mortgage
With this method of repaying your mortgage, you repay your loan, and interest charged, in monthly installments. Your loan is repaid entirely over the term agreed.

 

Shared Ownership
Shared Ownership schemes enables a borrower to buy a proportion of the property, with the remainder being owned by a housing association. Rent is paid on the remainder. The borrower is usually entitled to buy subsequent shares in the property at a future date.

Stamp duty
A tax paid by the person buying a property. The tax rate is based on the purchase price:

 

Standard Variable Rate (SVR)
Our Standard Variable Rate Mortgages, including any discounted rates and our Cambridge Variable Mortgage, are all linked to our Standard Variable Rate. The interest rate may change from time to time and this may result in changes to your monthly payments.

Stakeholder
The Government has introduced a Stakeholder Status for ISAs. This benchmark is designed to identify straightforward savings products which are simple, clear and fair. Stakeholder Status does not guarantee the best performance nor is it necessarily suitable for every saver.
 

Tracker rate
Our Base Rate Tracker Mortgages track the Bank of England base rate. The Tracker rate is not the same as the Bank of England base rate but the difference between the two will be the same.

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Valuation
When you apply for a mortgage we are required, by law, to carry out a property valuation to help us to decide whether and how much to lend on the property.

Valuer
The person appointed to value a property on behalf of a lender. Valuers are professionally qualified.
 

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