Guide To House Buying Jargon

housebuyingWhen you buy a house, you hear lots of unusual terms.

Here are our ‘dictionary’ definitions of terms used when buying a house to help you understand the convoluted world of property jargon.

Arrangement Fee

As the name suggests, it is the fee that the mortgage lender charges for arranging the loan.


To be behind with ones mortgage payments.

Building survey

The essential survey you must take out on the property, to assess its construction and condition, to make sure it doesn’t collapse the moment you open the front door.


A ‘chain’ of buyers and sellers i.e. the people you are buying the property from are in a ‘chain’ with sellers they are buying from, and you might also be in a chain with buyers of your property. At any given time this chain might, and frequently does, break down.


A payment made to an estate agent on completion of the house sale.


When contracts, keys and monies have changed hands between buyer and seller.


A legally binding agreement.


The complicated legal work your solicitor does to help you buy a property and make sure your rights are protected.


A legal agreement specifying the uses of the land or property.

Credit check

An examination of your previous credit worthiness, debt repayments and defaults. A poor credit score can limit your chances of further borrowing


A document granting legal ownership to a person of a property.

Endowment mortgage

A mortgage paid off by an endowment, which is an investment policy that pays out after a specific and fixed period of time or on the holder’s death.

Exchange of contracts

Where two people exchange contracts over a property.

Fixed rate mortgage

Where the interest rate on a mortgage is fixed for a period of time, normally in anticipation of a future rate rise.


The land beneath the property. Ownership of this is particularly important if you are buying a flat.


The rather dubious practice of offering a higher bid on a property to secure it, after it has been offered to somebody else.


The practice of demanding a lower price on a property at a crucial moment in the sale in the hope that the vendor will agree to prevent the sale from falling through.


Policies that pay out compensation to the holder in the event of accident, damage or ill health.

Interest only mortgage

A mortgage where the actual balance of the loan is not repaid, only the interest payments on the loan.

Land certificate

A document that verifies the ownership of a piece of land.

Land registration

The recording of ones ownership of a particular piece of land.

Land registry fee

The cost of the previous entry.


The ownership of a property for a fixed period of time, normally relating to flats. The leasehold ultimately belongs to the freeholder (see Freehold above).

Loan to value (LTV)

The ratio between the amount borrowed in a mortgage and the value of the property.

Local authority search

A search on a property carried out by your solicitor to find out who legally owns it and who has owned it in the past.


A property loan, typically 25 years in length.

Mortgage deed

The document that aforementioned loan agreement is contained within.

Mortgage indemnity guarantee

An insurance policy taken out by the lender to guarantee against the borrower from defaulting on their mortgage payments.

Mortgage offer

How much the bank will lend you.

Peppercorn rent

A nominal amount, normally £1, needed to satisfy the criteria for the creation of a legal contract.

Repayment mortgage

A mortgage where the borrower repays both the interest and the capital of the loan.

Stamp Duty

A compulsory tax due on all properties over the value of £125,000, calculated as a percentage of the property’s overall value.

Structural survey

A general term to cover three different types of survey, the condition report, the homebuyer’s report and the building survey (see above Building Survey).

Subject to contract

The seller of a property has accepted an offer on the home but the deal is not complete until contracts are exchanged.


The professional who carries out the survey.

Title deeds

A document detailing the ownership of a property.

Under offer

A property where an offer has been accepted and paperwork is pending (see Subject To Contract).


The person(s) selling the property.



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