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This content applies to Scotland only.
Housing laws vary between Scotland and England. This page applies to Scotland only. Get advice relating to England
Deposit
Many lenders won't let you borrow more than 90 or 95% of the value of the property or of the purchase price, depending on which is lower, so you will have to pay the rest as a deposit. The page on how much can I borrow has more information.
Discounted rate mortgage
If you have a discounted rate mortgage, for a fixed period of time you will be charged an interest rate that is lower than your lender's standard variable rate (SVR) but which will rise or fall in line with it. Once the discount period is over, you will probably be charged the SVR.
Early redemption
When you pay off your mortgage before the end of the term. Your lender may charge a penalty for this, called an early redemption charge.
Endowment mortgage
See interest only mortgage.
Endowment policy
A savings plan you can take out to repay the capital of your mortgage if you have an interest only mortgage. Endowment policies are no longer seen as a viable option, however, as many policies have now failed to make enough money to pay off the mortgage (see endowment shortfall below).
Endowment shortfall
Many people who took out an endowment policy in the past have found it hasn't made enough money to pay off their mortgage. This is called an endowment shortfall. Read the section on endowment shortfall to find out more.
Equity
Equity is the difference between what your home is worth and how much you owe on your mortgage. For example, if your home is worth £100,000 and your mortgage is £75,000, your equity will be £25,000. If the value of your home is less than your mortgage, you will have negative equity.
Fixed rate mortgage
This guarantees that the interest rate on your loan won't change for a set period - usually, from two to five years. The page on interest options has more information.
Flexible mortgage
If you have a flexible mortgage, the interest you pay will usually be calculated daily. In addition, you will have more freedom to repay the mortgage at a speed which suits you. Read the page on interest options to find out more.
Guarantor
If you are a student or on a low income, you may be able to get a mortgage if you can find a guarantor. If you default on your mortgage, the guarantor will be legally responsible for making the payments, so it isn't something to take on lightly. The lender will check that the guarantor would be able to afford the payments should this happen.