Mortgage jargon buster
A
Accountable Trust Receipt
Charged by the lender when title deeds are requested by a solicitor. You pay this as part of your legal fees.
Affordability Check
A lender’s assessment of whether you can afford a mortgage, based on your income, spending and existing debts.
Annual percentage rate of charge (APRC)
The APRC is the annual rate of interest you will be charged on a mortgage. It takes account of all the costs involved over the term of the mortgage, such as any set-up charges and the interest rate. You can use the APRC to compare different mortgages, as long as you compare them over the same term, for example 30-year mortgages.
Auction
A method of buying a property. It is a public sale of property whereby bids are offered in public and the sale agreed on the same day if one of the bids is accepted by the auctioneer.B
Broker
A professional who helps you find and apply for a mortgage.
Bridging loan
This is a loan from a provider, that acts as a link between the time frame of buying a new home and selling your existing home.
Building Energy Rating (BER)
The Building Energy Rating (BER) shows how energy-efficient your home is. A higher BER can attract better mortgage rates.
BER certificate
A BER certificate shows how energy efficient a home is. Sellers and landlords must have a valid BER certificate when selling or renting a property.
Buildings insurance
This insurance pays the cost of repairing or rebuilding your home if it is damaged by unforeseen events (as detailed in your insurance policy)
C
Capital
The amount of money you borrow for your mortgage.
Caveat Emptor: Buyer Beware
In Ireland, the sale of residential properties follows the principle of caveat emptor, or ‘buyer beware’. As a buyer it is your responsibility to investigate the property’s condition and legal status before buying it. Be sure you know what you're getting for your money.
Chain
A chain is a series of linked property transactions where each purchase depends on another property being sold. For example, a chain can form when a buyer needs to sell their current home to buy a new one, and the seller of that new home is also buying another property.
If one transaction in the chain is delayed or falls through, it can affect all the other transactions in the chain.
Contents insurance
This insurance covers the loss or damage of property within your home. For example, furniture, clothing, personal possessions etc. Contents cover is a separate type of insurance to buildings insurance, which covers the structure of your property.
Conveyancing
This is the term for the legal process of transferring the ownership of property from seller to buyer.
Cost of credit
The cost of credit shows you the real cost of borrowing. It is the difference between the amount you borrow and the total you will repay including the interest by the end of the loan period.
Clawback rules
Clawback rules are conditions that allow a lender to recover a benefit they previously gave you if you switch or repay your mortgage early. This often applies to cashback, discounted rates or contributions towards legal or valuation costs.
Credit history
This tracks your record in repaying loans. There is a new Central Credit Register, run by the Central Bank of Ireland. These keep files on individual borrowers, and use the information they get from lenders to build up each borrower’s credit history.
D
Debt consolidation
This means taking out a single loan to pay off a number of other loans. Also called ‘wrapping up your debt’, often a mortgage, to pay off individual, smaller, loans.
Deeds
These are the legal ownership documents of your home or property. Your lender holds them as security, until your mortgage has been paid off.
Default
This is when a payment or series of payments on a loan or mortgage are missed.
Deposit
A mortgage deposit is the difference between the price of a property and the amount you can borrow. Current Central Bank of Ireland rules mean a minimum deposit of 10% of the purchase price is typically needed for owner-occupier mortgages.
E
Early Repayment Fee
A fee for paying off your mortgage early or making extra repayments above the limit your lender allows.
Equity
Equity is the value of any assets you own after any debts are paid. In the context of your property, your equity refers to the difference between its market value and the mortgage you owe on it.
Equity release
These are schemes that allow you to release some of the equity, or the value you have built up in your home, without having to move out or sell it. Certain schemes are available to older homeowners in the form of ‘life-time loans’ or ‘home reversions’. Equity release is also referred to as ‘re-mortgaging’.
F
Fixed rate
This means interest is fixed at a particular rate over a fixed time. If rates fall you can miss out on the benefit but if rates increase your repayments will not increase for the fixed period. If you want to pay off your full loan within the set time, you may have to pay penalty fees.
Fixed rate penalty
An amount you may have to pay if you wish to pay off your loan, part of your loan or change any of the terms, during the fixed rate period.
Freehold
A type of property ownership where you own both the home and the land. There's ground rent to pay, and you have long‑term control over the property, including the freedom to make changes (subject to planning rules).
G
Grant of Probate
Authority to deal with a dead person’s estate. The Grant of Probate is the document which allows the assets of the dead person to be gathered and distributed. If you are buying a home that is being sold as part of the probate process factor in delays that may occur with conveyancing.
Gross Income
Your income before tax, used by your lender to assess affordability.
H
Help-to-Buy Scheme
A Government support scheme for first‑time buyers who are buying a new build. You can apply to be refunded any income tax owed to you in the last 4 years and any DIRT you have paid on savings. You can receive up to a maximum of €30,000.
HomeBond Insurance
HomeBond is a structural warranty and insurance scheme for newly built homes in Ireland. It’s there to protect homebuyers if major structural problems arise after the home is built. Properties registered with HomeBond Insurance are typically covered for things like loss of deposit if the builder becomes insolvent, certain types of defects, issues with mechanical and electrical equipment, and structural damage.
Home Insurance
Insurance that protects your home. This is typically required by lenders.
Home Reversion Scheme
Home reversion is a way of releasing cash from your home by selling part or all of it to a provider, while continuing to live there. You do not make repayments or pay rent, but you agree that the provider will receive their share of your home when it is sold, usually after you die or move permanently into long-term care.
You will not benefit from any increase in the value of the share you have sold.
I
Initial interest rate
The interest rate that applies to the fixed period of a fixed term mortgage product.
Interest-only payment
A repayment option where you pay only the interest charged on your mortgage each month, without reducing the amount you originally borrowed. This is usually offered as a temporary debt‑resolution support for those in mortgage arrears. Because the capital isn’t being repaid, your mortgage will cost more over the term.
Interest relief
A refund of tax available based on the amount of interest you pay on your mortgage.
L
Land Registry
This is a central register of the ownership of land and buildings. Not all properties are registered. You need to search the Registry of Deeds to find out if a property is registered.
Letter of Offer
The lender will issue the Letter of Offer when your bid has been accepted on a property and they are fully satisfied with the valuation etc. of the property. It confirms full mortgage approval amount and includes mortgage terms, interest rate, property details and conditions.
Lifetime mortgage
A lifetime mortgage is a loan secured against your home that allows you to release some of the value of your property without having to sell it or move out. You usually do not make regular repayments. Instead, the loan and the interest are repaid when your home is sold, typically after you die or move permanently into long-term care.
The amount you owe increases over time as interest is added to the loan.
Loan‑to‑Value (LTV)
Loan to value (LTV) is the amount of the mortgage compared to the value of the property. A lower LTV ratio can attract better mortgage rates.
Local property tax
A tax paid by home owners and based on property values. For more information visit Revenue.ie.
M
Mortgage Arrears Resolution Process (MARP)
Part of the Central Bank of Ireland's Code of Conduct on Mortgage Arrears, the MARP is a framework that sets out rules for how lenders must deal with borrowers when they fall into mortgage arrears or are in pre-arrears.
Mortgage contract
A document or group of documents containing all the terms and conditions laid down by your lender regarding your mortgage.
Mortgage deed
The legal document that you sign when you obtain a mortgage.
Mortgage protection
This is a form of life insurance product, which lenders must make sure you have in place when you take out a mortgage on your family home and if you are under 50 years of age. Your mortgage protection policy pays off the outstanding amount due on your mortgage if you die.
Mortgage term
This is the number of years you have taken out your mortgage for.
N
Negative equity
This term is used to describe a situation where the market value of your house is less than the balance you owe on your mortgage.
O
Overpayment
Paying more than your regular monthly mortgage amount to reduce your balance faster.
P
Principal
Another word for the mortgage capital.
Principal dwelling home (PDH)
The private home in which a personblives alone or with their family. This could be a house, apartment, building, or group of buildings occupied as a place of residence.
Private treaty
A method of selling a property. Bids are offered in private over a period of time, usually to an auctioneer, and the seller decides which one to accept.
Property services agreement
A property services agreement is a written contract between you and a licensed property service provider, such as an estate agent or letting agent. It sets out the services being provided, how long the agreement lasts, and the fees or commission you will pay. By law, a licensed provider must have a signed property services agreement in place shortly after they start providing their service.
S
Searches (property)
Your solicitor will do searches to confirm that the seller of a property can pass ownership to you and that there are no outstanding judgments or debts against the property.
Security
Security is any asset that can be sold to repay the loan if you don’t. It may be a mortgage on a property, an insurance policy or some other asset. Your lender might ask you to put up some form of security before giving you a loan.
Stamp Duty
Is the tax when you buy a property. You pay 1% stamp duty on the first €1 million, and higher rates on amounts above that. Visit Revenue.ie for more information.
T
Tracker mortgage
This is a mortgage that is set at a fixed percentage or ‘margin’ above the ECB rate. For example, it could be set at the ECB rate plus one percentage point. So, if the ECB rate rises by a percentage point, so does your rate. It will also ‘track’ the ECB rate when this rate goes down.
V
Vacate fee
A fee charged when you have repaid your mortgage for the provider to remove its claim to your property and return your deeds.
Valuation fee
Paid to an estate agent or surveyor approved by your mortgage provider to confirm the property's value.
Valuation report
A valuation report is an estimate of a property’s value provided to a lender by a valuer. The fee for the report is usually paid by the borrower.
Variable rate
Variable rates rise and fall in line with general interest rate changes in the euro zone. Variable rates offer the most flexibility (over fixed rates) and allow you to pay off part or all of your loan without having to pay any fees or penalties.
Vendor
The vendor is the person selling a property.
