Building societies
- arrangement fee: some building societies charge a fee to arrange a mortgage. It can be added to the amount you borrow, but if you choose this option you will pay interest on the fee.
- base rate: rate of interest set by the Bank of England upon which most building societies base their mortgage interest rates.
- building societies: mutual organisations, owned by their customers, whose main purpose is to provide mortgages and savings accounts.
- capped rate: a mortgage deal where a building society guarantees that the interest you pay will not rise above a fixed upper limit for a set period, even if the base rate rises beyond that limit.
- cash-back: a sum paid back to you by a building society at the start of your mortgage.
- discount rate: a special rate offered by building societies for a limited period, calculated by applying a set discount on its standard variable interest rate.
- fixed-rate: a deal where the interest rate you pay on your mortgage is fixed for an agreed period, which is usually two, three or five years. This is useful for planning budgets and is a good buy when interest rates are rising, though not so good if they are likely to fall.
- interest-only: a mortgage where you pay only the interest back to the building society each month and repay the loan itself at the end of the mortgage term. You will need some other form of savings or investment to cover the loan.
- mortgage: a loan made by a building society that is secured on your property.
- mortgage rate: the rate of interest a building society charges on its mortgage loan.
- mortgage term: the length of time over which you repay the loan to a building society, usually 25 years.
- repayment mortgage: a type of mortgage where you pay back interest and capital on the amount you borrow to building societies each month, with the mortgage being repaid in full by the end of the mortgage term.
- roll number: when you open an account with a building society or take out a mortgage, you become a member of that building society and are given a roll number as identification of your membership.
- standard variable rate: the interest rate a building society applies to a mortgage account when no other overriding scheme such as a fixed rate is in force. It fluctuates and generally follows the Bank of England base rate.
- tracker: a type of mortgage where the interest rate follows the bank base rate. It is usually set at base rate plus between a quarter and one per cent, so is in effect a type of discount mortgage.
All guides on Yell.com are provided for general guidance only, do not constitute legal or professional advice and are not intended to be exhaustive.
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