Progressive Jargon Buster

This is the amount of money in your account. 

This is when an existing mortgage customer wishes to borrow more.

You may receive additional charges such as arrangement fees or completion fees related to your chosen mortgage product.

These will be shown in the mortgage illustration provided. If you are using a mortgage broker, they may also have fees that you will have to pay.

An additional ISA allowance that is available to the surviving spouse or civil partner of a deceased ISA holder. This is available on top of your normal annual ISA allowance.  

The fee charged for the administration involved in arranging the loan.

Sometimes called the loan. This is the actual amount of money that we agree to lend you.

We must establish that you are able to afford your mortgage both now and in the foreseeable future.

An affordability assessment works out how much you might be able to afford to pay back on your mortgage based on your income and outgoings.

An affordability assessment usually involves a credit check which will leave a hard footprint on your record.

Used for anyone in the property who is not on the mortgage deed but is over the age of 17 when you take out a mortgage or remortgage. This prevents them from claiming squatter’s rights if the property may need to be repossessed.

Anti-Money Laundering.

AER means Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. This enables you to compare more easily the return you can expect from your savings account.  

APRC stands for the Annual Percentage Rate of Charge used to compare loan offers. This is the total cost of credit expressed as an annual percentage of the total amount of credit.

A set-up fee for your loan. Most lenders will allow you to add this fee to your loan, but this will mean you pay interest on the fee for your whole mortgage term.

The term used to describe overdue payments where a borrower has failed to keep up the monthly mortgage payments.

You are in arrears if you have missed one or more mortgage payments and you should contact us as soon as possible if you are struggling to make your payments. We will always do our best to help you.

An AVM is the name given to a service (system) that can provide property valuations using mathematical modelling, combined with a database of information on property values.

This stands for Bankers Automated Clearing System, which is used to send money payments electronically between banks. 

Base rate usually means the Bank of England base interest rate. Savings and mortgage interest rates are normally determined by base rate (along with other factors).

Where the interest rate goes up and down in line with the Bank of England Base Rate. The rate you pay may be a specific rate above or below the base rate and you may start off on a lower rate, but this could potentially rise in the future.

*Not currently available

The person who owns and benefits from the funds held in a savings account. 

The Society will issue a binding mortgage offer following receipt of an acceptable mortgage application.

A bond is a savings account which will earn a fixed or variable rate of interest over a set period of time. Bond terms can vary, usually between 1 to 5 years and the longer the term the higher the rate of interest tends to be. 

These accounts are suitable if you do not need access to your savings and can invest a lump sum of money for a fixed period of time. 

The person or persons to whom the Society lends the money for a mortgage. If there is more than one borrower all parties to the mortgage are responsible for repaying the full amount of the mortgage.

Also known as an intermediary, a broker is an agent who can advise you aboutm and sell you products like insurance or mortgages. Brokers may be independent or tied to a large network.

A building society is a type of financial institution that provides mortgages and savings accounts to its customers.

Many of a building society's customers are also members. The society is run for the benefit of members rather than shareholders.

Insurance that covers you for damage to the structure of your home. A lender will require you to have this in place when you take out a mortgage.

Also known as Consumer By To Let, BTL, or CBTL, this is when someone buys a property to rent it out as an investment.

Your monthly payment covers the interest and also reduces the total balance outstanding.

The amount of money you borrow to buy a property.

Your capital is the overall amount of money invested.

When a borrower makes a one-off payment to reduce the outstanding balance on their mortgage.

A variable rate mortgage with a guarantee that your interest rate will never go above a preset limit (the cap/ceiling) during the product period.

CO2 is the main greenhouse gas created by humans and our homes currently account for around 22% of UK carbon emissions.

An increase in greenhouse gases will trap more heat in the atmosphere and could make the earth too hot for humans.

The amount of CO2 gasses we release. The lower your carbon emissions, the less you’ll contribute to climate change.

A legal document from the High Court in Northern Ireland appointing a Controller to manage an individual’s financial affairs if they become mentally incapable.    

With this type of mortgage, the lender will give you a certain amount of cash on completion. You should factor this into the total cost of your mortgage over the initial period to decide whether it’s a good deal.

County Court Judgement. These are made against you for non-payment of debt, and could make it harder for you to get a mortgage. Even when satisfied, a County Court Judgement will remain visible on your credit file for a number of years.

This stands for Clearing House Automated Payment System, an electronic transfer system, which allows you to make deposits into your savings account with same day clearance. 

CHAPS is a chargeable service so please refer to our Tariff of Charges for further information.  

A change in global or regional climate patterns. The more CO2 we release, the more sunlight gets trapped in our atmosphere. The more sunlight gets trapped, the hotter the climate becomes.

A variable rate mortgage with a guarantee that your interest rate will never go below a preset limit (the collar/floor) during the product period.

Refers to the date your mortgage term begins, after your application has been accepted and the loan has been released.

Insurance that covers damage to, or loss of, your belongings from fire, flood, and theft, among other things.

The name given to a person appointed by the High Court in Northern Ireland to manage an individual’s financial affairs if they become mentally incapable.   

The legal process you must go through when you buy or sell property. This work will usually be undertaken by a solicitor or licensed conveyancer.

Counterparty credit risk is the risk that the counterparty to a transaction could default before the final settlement of the transaction’s cash flows.

A covenant is a provision, or promise, contained in a mortgage deed. There are two different types of covenant, positive and restrictive.

A positive covenant requires some form of action to be taken, such as repair or maintenance of the property, or building a
boundary fence.

A restrictive covenant limits or prevents the use of land such as no alterations to the property without consent, not to park certain vehicles on the land, or not to erect satellite dishes.

When you make an application for a mortgage all lenders will carry out a credit check to see how you have managed your finances in the past. A credit check will usually leave a hard footprint.

Credit reference agencies provide factual information, about how you have managed your existing and previous credit arrangements, so that we can make a decision about whether to lend you.

This is the report produced by the credit reference agency, detailing your credit performance.

We are required to confirm the identity of all customers who open a new Savings Account.  To prove your identity documents such as a passport or driving licence may be required.   

The interest chargeable on the outstanding mortgage balance is calculated every day rather than at the end of each week, month, or year.

Direct Debit.

The process of combining existing credit arrangement(s) or liabilities into one loan and making a single monthly payment.

Sometimes known as an Agreement in Principle or Mortgage in Principle, it gives an indication as to how much you could borrow. 

A DIP is for illustrative purposes only and doesn't provide all the information you need to choose a mortgage.

A default occurs when a debtor is unable to meet the legal obligation of debt repayment. A default will be registered on your credit file and may affect your credit rating and your ability to borrow in the future.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Someone who is financially dependent on you.

This is the amount you are required to put down yourself towards the cost of the property.

A deposit is an amount that you pay into a savings account.

A discounted-rate deal is one where the interest rate you are charged is a set amount less than our standard variable rate (SVR).

For example, if our SVR was 5.5% and the discount is 1%, you would pay 4.5%. This is a variable rate and should the SVR increase or decrease, the rate you pay would alter too.

Single use items such as plastics e.g. plastic forks. These kind of items are used once then thrown away. Because disposables often can’t be recycled, they make their way to landfill.

This is bad for the environment, which is why we’re encouraged to cut down on our use of disposables.

A dormant account is one that has had no transactions made on it for at least 15 years. 

A charge which may apply if you repay your mortgage early or make an overpayment that's more than your annual overpayment allowance.

They will normally apply during the initial period of your mortgage deal being in place.

Using less energy (therefore spending less money) to get the same result.

An energy performance certificate gives a rating of how energy efficient a home is and also recommends how its efficiency could be improved.

The difference between the value of your property and the amount of any outstanding loans secured against it (i.e. the amount you own outright).

This document shows you all the key information you need when choosing a mortgage. You can use it to compare different mortgages with different lenders. Also known as a mortgage illustration.

Allows a mortgage advisor to gather accurate information regarding your personal circumstances such as employment, affordability, dependants etc.

This enables the advisor to ascertain any needs and circumstances he/she needs to take into consideration before recommending an appropriate mortgage

An electronic transfer service which allows you to make money transfers into your savings account from accounts held elsewhere by the next business day. 

The FCA is the Financial Conduct Authority, a regulatory body in the UK. The FCA regulates financial firms providing financial services to consumers and operates independently of the government.

Financial problems or financial pressure is a situation where money worries are causing you stress.

From time to time customers may experience financial difficulties due to unemployment, sickness, relationship breakdown or changes in personal circumstances. 

It is important that if anything like this happens the Society is advised as soon as possible. For more information on financial difficulties or mortgage arrears, explore our resources, contact the Society by telephone, or call into one of our branches.

The official independent complaints service, which works to resolve complaints between consumers and businesses that provide financial services.  If we cannot resolve the complaint to your satisfaction, you have the right to refer your complaint to the Financial Ombudsman Service.    

The Financial Services Compensation Scheme can pay compensation to depositors if a financial institution is unable to meet its financial obligations. 

Most depositors are covered by the scheme.  At Progressive we are covered by the Financial Services Compensation Scheme.     

Also known as first charge mortgage. This means that the loan takes priority over any other borrowing secured on your property, if your property is sold the first charge will be paid off first.

A person buying their first property.

A mortgage where the interest rate charged is fixed for a set period, usually between two and five years. This means you can be sure what your mortgage payments will be each month throughout the period.

If any part of your income, used in assessing affordability for the mortgage, or if any asset to be used to repay the mortgage balance, is in any currency other than sterling your mortgage will be treated as a foreign currency loan.

The Society will only accept Euro or US Dollars as an alternative currency to sterling. You must be resident in Northern Ireland.

Not all lenders accept foreign currency loan applications. Acceptance of foreign currency loan applications will be subject to the Society’s current lending criteria.

You own the building and the land it stands on. See 'Leasehold' for comparison.

Also known as a builder’s survey. This is the most thorough type of survey and is used to uncover any structural issues with the property. It is often used in older properties.

A gas that contributes to the greenhouse effect by absorbing infrared radiation. Carbon dioxide and chlorofluorocarbons are examples of greenhouse gases.

The taxable rate of interest without deduction of income tax.

A charge you may have to pay to the freeholder if you own a leasehold property.

A legal commitment by the Guarantor to meet the monthly mortgage repayments if you are unable to do so.

A third party who agrees to meet the monthly mortgage repayments if you are unable to.

HM Revenue & Customs (HMRC) is a government department which is responsible for the collection of taxes, the payment of some forms of state support and the administration of other regulatory regimes including the National Minimum Wage.  

A survey done on the property by a registered surveyor. This is instructed by the buyer as a way of confirming if the property value is in line with current market prices, and if there are any signs of work that are needed.

They are usually less thorough than a full structural survey, or building survey.

Internal Complaints Procedure.

The way some lenders work out how much you may be able to borrow, by multiplying your annual income.

Income multiples only give an indication of what you may be able to borrow and all mortgage applications submitted will be subject to an affordability
assessment.

This is a tax which is payable on any income you earn. 

This is a type of insurance that protects lenders against financial loss if a borrower or guarantor fails to meet the monthly repayments.

A tax paid on the estate – the money and property – of a deceased person.

Instant access accounts are an option if you want to save but also have quick access to your money when needed. 

These accounts are suitable if you want easy access to your funds with a variable interest rate that is paid annually. 

When something is insulated, the temperature on the inside isn’t affected by the temperature outside. In the context of your home, it means keeping warm air in and cold air out.

If your house is well-insulated, warm air won’t escape, meaning you’ll use less energy to keep your home warm.

This is what you pay the Society on top of the amount of money you initially borrowed. Interest rates can go up and down, or they can be fixed.

This is what the Society pay you if you keep your money with them. Interest rates can go up and down, or they can be fixed.

A mortgage where you only pay back the amount you are being charged in interest each month. The amount of money you borrow does not decrease over the term of the mortgage and you will need to find another way to repay the original loan at the end of the mortgage term.

An ISA is a type of savings account which is not taxed by the government. The government sets a limit on the amount of money you can save in any one tax year.

The tax year runs from 6 April one year until 5 April the
following year.

A flexible ISA allows you to withdraw and reinvest your money without affecting your ISA allowance if done within the same tax year.  

A savings account designed for those who are saving for their first home. You can pay in up to £200 per month and the government will add a bonus of 25% when you buy a house, provided your closing balance is between £1,600 and £12,000.  

The bonus is capped at £3,000.   

Junior ISAs were introduced on 1 November 2011 as a replacement to Child Trust Funds (CTFs).  A child can open their own account from age 16, alternatively a parent or someone with parental responsibility can open the account on behalf of an eligible child. 

They are available to children who are under the age of 18 and do not have a Child Trust Fund.  

Each tax year, every UK resident aged 16 and over gets an annual tax-free allowance. This amount can vary.  

The tax year runs from 6 April to 5 April the following year.      

Junior Individual Savings Accounts.

This is a mortgage taken out by two or more people which might be used if you were buying a property with a partner, friend, or relative.

The responsibility of all mortgage borrowers to repay the mortgage. This means that if there are two people named on the mortgage and one person misses the payments, the other person is still legally responsible to pay the full amount of the mortgage each month, not just their share.

A fee charged to register your details in the Land Registry records once you have bought a property or changed lenders. Our solicitor will advise you on this and will arrange for payment of this fee on your behalf.

You own the building but not the land it stands on, and only for a certain period (anything up to 999 years). You may find it hard to get a mortgage if there are fewer than 80 years left on the lease of the property you want to buy.

These are the fees you pay to a solicitor when you take out a mortgage.

Typically the bank or building society you have your mortgage with.

A contract between you and an insurer which will pay out a cash sum if you die during the term of the policy.

Some savings products, such as Fixed Rate Bonds, are limited issues and therefore will only be available for a short period of time.  This means that they can be withdrawn from market without notice.   

Sometimes called the advance, this is the actual amount of money that we agree to lend you.

This is the proportion of the mortgage compared with a property’s value. It’s expressed as a percentage, so an £85,000 loan on a £100,000 property would be an LTV of 85%. 

The LTV you have affects the mortgage rates available to you.

The day when an account reaches the end of its fixed term.

The date when money placed in a fixed term account reaches the end of its term. 

The maximum amount you can invest in an account as specified in its key product information.

Anyone who has a qualifying account such as savings or a mortgage account with Progressive Building Society. Our customers are ‘Members’ because we are a mutual society.

This is the least amount of money you can deposit into a savings account. 

Where interest is paid on a monthly basis, rather than an annual basis.

The amount you pay us every month. If you're on a repayment mortgage, your monthly amount will be an element of capital plus interest and calculated in such a way that the loan will be repaid in full at the end of the mortgage term.

A loan provided by a bank or building society (the “lender”) to a person buying a property (the “borrower”).

The actual amount of money we lend you.

A formal contract between lender and borrower outlining the legal obligations of the borrower and the rights the lender has if the borrower fails to make a repayment.

Sometimes called a Mortgage Exit Fee, this is a fee charged by the lender for releasing the legal charge over your property following repayment of a mortgage.

The amount of time you are taking the mortgage out for – 25 years, for example.

A check made by mortgage lenders to see if the property is worth the money they are lending – not the same as a survey.

The lender or institution which provides the funds for the mortgage.

The borrower taking out the mortgage.

A financial institution owned by its members as a mutual organisation. Being a mutual means that we are owned and run for the benefit of our many members.

When the value of your home falls to a level that is below the amount remaining on your mortgage.

A person operating a savings account on behalf of another person (the beneficiary) i.e. a parent holding an account on behalf of a child. 

A type of energy that will eventually run out. This means once it's gone it's gone. Fossil fuels, e.g. coal, oil, and gas, are all types of non-renewable energy.

While these are powerful sources of energy, releasing a lot of energy for a small amount, they also generate a lot of CO2.

The scheme is managed by the Northern Ireland Co-ownership Housing Association. Co-ownership allows you to part-buy and part-rent your home.

You must buy a percentage of the value of the property through a mortgage. You pay rent on the remaining share of your home

An account which requires a specific period of notice to be given by the account holder before money can be withdrawn.

A document which sets out the terms and conditions of a mortgage contract between you and the Society.

This is a combination of both repayment and interest only mortgage.

For example, a loan of £50,000 could be made up of £30,000 repayment and £20,000 interest only, so there would be a remaining capital balance of £20,000, plus any fees and charges which have been debited, to repay at the end of your mortgage term.

You may be issued with a passbook when you open a new savings account.  It helps you keep a record of your account balance and it must be produced when you make a withdrawal. 

Also known as a Payment Holiday, this is an arrangement between yourself and the lender to allow you to stop or reduce your monthly payments for an agreed period.

If you are experiencing payment difficulties, it’s best to get in touch with us as soon as possible and we will do our best to help you.

When a notice period applies to an account a penalty may be incurred for an immediate withdrawal or the closure of an account, subject to the account terms.

The penalty would usually be calculate on the amount withdrawn.

To be considered a permanent resident, you must have indefinite leave to remain in the UK and you should consider the UK as your home.

This is the amount of interest you can earn on your savings without paying tax. Your allowance depends on whether you're a basic, higher or additional rate taxpayer. Interest from ISAs doesn't count towards this allowance. 

A portable mortgage allows you to transfer your borrowing from one property to another if you move, without paying arrangement fees.

A written legal document that gives an individual the authority to act for another person. 

If you have more than one mortgage with us on different properties we can require you to redeem all, both, or neither.

The fee payable to obtain a particular product. Where fees are chargeable on any mortgage product, this will be clearly stated on any promotional items and the Key Facts Illustration.

In some circumstances, this fee can be added to the loan, however, if you chose to do this you will pay interest on the sum added.

During your mortgage term, if a more attractive or suitable mortgage product becomes available, you may be able to switch your product to this one.

However, this may incur extra charges, especially if you are still within your fixed / discount rate period.

The statutory body responsible for the prudential supervision of banks, building societies, insurers, and small number of significant investment firms in the UK.

The PRA is a subsidiary of the Bank of England.

The cost of rebuilding your home if it is destroyed. Commonly used for insurance purposes.

The process of repaying a mortgage in full. Paying off a mortgage before the end of a mortgage term is referred to as “early redemption” or “early repayment”.

Regular savings accounts encourage you to save on a frequent basis, but there may be limited access to the funds. These accounts are suitable for savers who wish to get into a savings habit by investing a fixed amount each month. 

When you change your mortgage without moving house. You can do this to save money, to change to a different type of mortgage, or to release equity from your home.

A type of energy that will not run out. Solar energy and wind power are both examples of renewable energy.

Also known as a capital and interest mortgage, this is a mortgage where your repayments each month cover the interest on the mortgage and pay back some of the capital borrowed.

Eventually at the end of the mortgage term you will have repaid the debt, unlike an interest-only mortgage where you will still need to pay back the capital borrowed.

This is the means by which you choose to pay off the amount borrowed on an interest only or part and part mortgage when the mortgage term comes to an end.

You need to check with us to make sure that your chosen repayment strategy is acceptable to the Society.

This is needed for interest only mortgages. It is the means that you plan to use to repay the capital for the mortgage at the end of the term.

If the borrower defaults on payments, the mortgage lender may retake possession of the property. This is the last resort for mortgage lenders and they will usually try to come to an arrangement to have the mortgage paid back if the borrower is experiencing financial difficulties.

Refers to the interest rate that at least 51% of those accepted for that product will get. Up to 49% of the remaining applicants may be charged higher APR.

An example of the costs associated with a mortgage based on the mortgage lenders typical borrowers. This will show the monthly repayments, the total amount to repay, including the amount of interest to pay, and any fees there are to pay.

The Society’s rules which regulate the relationship between us and you, our savers and borrowers. All Members receive access to the rules.

Checks carried out by solicitor during the conveyancing process e.g. planning proposals or other matters, which might affect the future saleability of the property.

The property and / or the funds used by the lender to ensure the repayments of a loan are met.

An account which will qualify you for membership of the Society. 

You buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share, which is owned by the local housing association.

Government tax you may have to pay on the purchase price of a property. The percentage you pay varies according to the purchase price of the property. 

Also known as SDLT.

This is the default mortgage rate determined by the Society, which is applicable after your initial mortgage deal period ends.

This could be higher or lower than your original rate and can go up as well as down over the period of the loan. You need to ensure your monthly budget allows for variation in your mortgage payment.

A Standing Order (SO) is an automated payment that you can set up from your current account. It will send a regular payment (normally monthly, quarterly, or yearly) to the person or company you wish to pay.

A statement of interest is issued to you annually and shows the amount of interest you have received on your savings.  

This will show you how much interest you have earned on your account during a specific tax year. These can be issued to you on written request and can be used when claiming any tax back from HMRC.

The most comprehensive type of building survey.

A Summary Box is the key product information about a savings account.  It is designed to provide suffice information on an account to enable a comparison with other savings products. 

If something is sustainable, it means it’s not being used up as quickly as it’s being replaced.

To be sustainable requires two things: that you use renewable sources of energy, and that you are being energy efficient.

When a customer moves to a new mortgage with the same lender, e.g. their fixed rate period ends and they move to a discount rate mortgage.

A charge you pay to the government. There are different types of tax but income tax and inheritance tax are the ones most people may be aware of. 

The interest paid is exempt from income tax.

A tax year runs from 6th April one year until 5th April the following year. 

The length of time over which your mortgage loan is to be repaid.

The term is the period of time your savings runs for.

The interest rate calculated depends on how much you have in your account. 

This is the period during which you are 'locked in' to your mortgage deal. You'll have to pay an early repayment charge if you leave your mortgage during this period. Avoid mortgages that tie you in after your introductory rate has ended.

The interest rate on your mortgage tracks the Bank of England base rate at a set margin above or below it. The Society does not presently offer tracker mortgages.

The legal document which transfers ownership of registered land.

When you transfer a proportion of the ownership of the property to someone. This can be as a result of a marriage or divorce, where a person is added or taken off the mortgage.

A Trustee is someone who is appointed to hold the funds in the account for the benefit of the beneficiary.  There will be a Trust document naming the Trustee. 

The process that a lender uses to assess the creditworthiness or risk of a potential customer.

All mortgage approvals are subject to the property having a mortgage valuation report carried out on behalf of the Society.

Depending on the mortgage product on offer at the time of application, a fee may be payable for this.

The interest rate on your mortgage can go up or down in line with the prevailing rate at the time.

Variable rate savings accounts mean the interest rate can go up or down in line with the prevailing rate at the time.

The term used to describe the seller of a property.