A charge payable on some loans and mortgages if they are repaid early.  The amount depends on the loan outstanding and its terms.  Many Lenders charge a fee to cover the overall cost of the Customer not keeping the loan for the agreed period.  This particularly applies to certain types of mortgages, such as those with fixed, discounted or capped interest rates and to cashback mortgages.

A charge made by the Lender if the loan is repaid early or refinanced before the agreed date.  Also see Early Repayment Charge.

In May 2005 finance laws were changed regarding early settlement payments on regulated credit agreements (regulated credit agreements are currently £25000 or below).  A standardised approach was taken and now the maximum charge is 2 months interest when somebody settles a regulated loan early.  Non regulated loans (over £25000) can be settled early but different rules generally apply and reference would need to be made to each Lender separately.  We recommend that you read in full terms and conditions of any Lenders credit agreement before proceeding.

Normally applies to a person who has an open-ended contract of employment and has income tax and national insurance contributions deducted from their salary.

This is a combined life assurance/savings policy designed to produce a lump sum at the end of the term.  They are often used as a repayment vehicle for an interest only endowment mortgage.

An interest only mortgage which is designed to be repaid at the end of the term by the proceeds of an endowment policy which would have matured.

A major UK Credit Reference Agency.  www.equifax.co.uk

The word equity is used to refer to the difference between the value of a property and the amount of all mortgages and loans secured on that property.  It is what you would have left after selling a house and repaying the loans.  So for example, if your outstanding mortgage is £60,000 and your home is worth £80,000, you have equity of £20,000.  If the property is worth less than you owe this is called 'negative equity'.

Equity release is a way for people to release some cash from the home without having to move. It is used mostly by older homeowners who either have paid off their mortgage altogether or have a small amount left to play.  Two of the most common ways to release cash and remain in the property are Lifetime Mortgages and Home Reversion Plans. Refer to each one for further information.  These products are generally only available for people over 55 years old.

Refer to Early Repayment Charge.

Agreement signed by a house purchaser and vendor committing themselves to the transaction.  Once this has occurred a legally binding contract is in existence and the purchaser must complete the purchase within a specific period of time.  If either party pulls out, compensation will be due to the other party.

This is a term used when a credit agreement is formally accepted by the Lender and an authorised signatory signs the credit agreement on the Lenders behalf, this is known as executing a document.  Clearly this terminology can be confusing particularly if we lived in the days of Charles the 1st!

This is where an early repayment charge applies even after the scheme date has ended.  It is designed by the Lender to hold a Customer with them for a longer period if possible.