| Term | Explanation |
| APR – Annualised Percentage Rate | This is a financial tool to help you identify the true cost of borrowing. It must take into account the rate of interest, how the interest is calculated e.g. monthly/daily/annually and any additional fees or charges. |
| Annuity Mortgage | This is another term for a standard Capital and Interest Repayment Mortgage. |
| Insurance | |
| Building Insurance | The policy covering the structure of the building, which you must have. A valuation on the property will state the amount of cover required. |
| Life Assurance | Mortgage protection. This means that the balance outstanding on your mortgage will be repaid on death during the term of the mortgage. |
| Indemnity Bond | A type of insurance that covers the lender in the event that they make a loss in the sale of a repossessed property. Indemnity bonds are required if the loan exceeds 75% of the purchase price of the property, but this percentage may vary from lender to lender. |
| Types of mortgages |
| Bridging loan | A short-term personal loan from the bank the client may need should the purchase of the new house complete before the sale of their existing home. |
| Discount Variable Rate | A special offer made to new mortgage business by reducing the variable rate by a nominal percentage for a fixed period. At the end of this period the mortgage will normally revert to a standard variable mortgage. |
| Fixed | The rate of interest will not change and the repayment will stay the same over a fixed period i.e. 1 year fixed , 3 year fixed etc. regardless of changes in the lender's standard variable rate. |
| Interest only | The interest only portion of the repayment is made to the lender. No capital is paid off the loan during this period. |
| Pension Mortgage | An interest-only loan where the capital will be paid out of the proceeds of the tax-free lump sum received when the pension matures. |
| Tracker Mortgage | A relatively new concept to the Irish mortgage market, a tracker rate is variable, linked to the European Base rate, for the term of the mortgage. Some banks tend to offer more attractive rates to customers borrowing low LTV when they chose a tracker mortgage. The lenders can only change their rate when the European Central Bank announce a rate change. |
| Variable | Interest rates that will vary over the term of the loan, normally in line with the general cost of borrowing. |
| General |
| Accountants report | When an applicant is self-employed, their accountant is requested to submit a report outlining their annual income, tax position etc. |
| Additional security | Where the lending exceeds a certain LTV, lenders may require additional security, e.g. lien on savings or a guarantor. |
| Adverse credit | If payments have been missed on a mortgage or any other loan this will show up when the lender carries out a credit check. Depending on the extent of the problem it may cause the lender to reject your application. |
| Basic annual income | The amount of money earned that is guaranteed regardless of the performance of the company. |
| Booking deposit | This is the initial amount of money, normally given to the selling agent to secure the property. This money is refunded if the sale does not go ahead. |
| Buy to let | (Residential investment mortgage) When a property is bought, not to be lived in by the owner, but rather to be let out to tenants. |
| Capped rate | While the interest rate may rise or fall with demand the rate will not exceed a maximum (capped) rate. |
| Commercial mortgage | The mortgage in this case has no residential aspect to it - i.e. a shop |
| Conveyance | The work undertaken by the solicitor to transfer the ownership of the property. |
| Debt consolidation | Replacing all your existing loans with one mortgage from either a new or existing bank or mortgage lender. |
| Deposit | This is the money paid over, through your solicitor, to the seller’s solicitor upon exchange of contracts. |
| Equity release | The equity is the stake you own in your property - the value of the property less any loans secured on it. An equity release loan is when you increase the mortgage on the property thereby reducing your stake.( equity release loans are sometimes available to home owners over 60 years of age with no monthly repayments) |
| Guarantor | Similar to additional security, but in this case the lender will require a second party to guarantee that the loan is paid. |
| I.C.B. | The Irish Credit Bureau holds a record of the conduct of loans. Before an agreement is given to grant a mortgage, the lender will carry out a check with the ICB to ascertain your credit status. |
| Joint application | Where there is more then one borrower. |
| Land registry fee | A fee charged by the Land Registry to amend an entry in their records to show the new owner or lender. |
| LTV - Loan to value | The amount you are borrowing as a percentage of the value of your property. |
| Mortgage deed | The legal document establishing the loan on the property. |
| Outgoings | These are your monthly costs, such as a car loan or maintenance payments, which the lender will take into consideration before they agree to offer you a loan. |
| Principle | This is amount of money outstanding on the loan at any time. |
| Redemption | The loan is cleared either at the end of the mortgage term or earlier. |
| Re-mortgage | When a new loan is created on the property to replace an existing mortgage. |
| Section 23 / 50 etc | Section 23 / 50 etc This relates to properties that have a special tax incentive attached to them – see www.revenue.ie |
| Self-certification of income | The applicant confirms his or her own income to the lender. |
| Special conditions | These appear on the loan offer and must be complied with before the loan cheque issues. |
| Split Mortgage | A loan where you take out two different terms or two different interest rates. |
| Stamp duty | A Government tax charge as a percentage of the price/value of the property. Most new houses are exempt from this charge. For more information go to www.revenue.ie. |
| Structural survey | Recommended for old houses. It is a full and comprehensive report of the property. |
| Term | The length of time before the mortgage/ loan must be repaid. |
| Valuation | This is a confirmation from a qualified valuer that the property exists and that it will provide good security for a loan secured on it. |
