Mortgage Glossary

Enhance your comprehension of common mortgage terminology by consulting with the reputable brokers at Fortier Finance. Our experienced team is dedicated to demystifying the intricate language associated with mortgages, ensuring that you navigate the financial landscape with confidence and clarity.

Our commitment extends beyond merely offering financial services; we believe in equipping our clients with the knowledge needed to make sound financial choices.

By partnering with Fortier Finance, you gain access to a wealth of expertise and a supportive team ready to guide you through the intricacies of mortgage terminology.

Below is a compilation of essential terms that may or may not be utilized in the mortgage application and processing :


A mortgage is a borrowed sum secured against an asset, often obtained from a financial institution such as a bank or building society.

Mortgage Lender.

A mortgage lender is a financial institution, such as a bank or building society, that extends mortgage offerings to individuals seeking to purchase or refinance properties.

Loan-to-Value (LTV).

The loan-to-value ratio calculates the difference between the amount borrowed and the total value of the property. It is a critical metric in mortgage lending, influencing the terms and conditions of the loan.

Repayment Mortgage.

Distinguished from interest-only mortgages, a repayment mortgage involves monthly payments covering both interest and a reduction in the outstanding capital. This ensures a gradual repayment of the loan over the mortgage term.

Fixed Rate Mortgage.

A fixed-rate mortgage maintains a consistent interest rate over a predetermined period. While it shields borrowers from potential payment increases in times of rising interest rates, it does not allow them to benefit from lower payments in case of interest rate decreases.

Variable Rate.

A variable rate, often referred to as an adjustable rate, is an interest rate on a financial product, such as a loan or mortgage, that can fluctuate over time. Unlike a fixed rate, which remains constant for the entire term of the loan, a variable rate is subject to changes based on underlying benchmark rates or indexes.


Interest refers to the amount added to the total borrowed sum each month until the entire loan is repaid. Essentially, interest represents the cost associated with the mortgage.


Euribor, or the Euro Interbank Offer Rate, serves as a reference rate derived from the average interest rate at which Eurozone banks extend unsecured short-term lending on the inter-bank market. It plays a significant role in determining interest rates for various financial instruments.

Arrangement Fee.

Arrangement fees encompass the charges levied by the mortgage lender to cover administrative expenses associated with the establishment and securing of a mortgage loan. Typically, clients are responsible for covering these costs, which contribute to the overall process of setting up the mortgage.


Equity represents the share of the property owned by an individual. As loan repayments progress, equity increases, signifying the gradual growth of ownership in the property.

Interest-Only Mortgage.

An interest-only mortgage entails monthly payments covering only the interest portion, without contributing to the property’s equity. The full mortgage amount must be repaid at the end of the mortgage term, typically requiring a repayment strategy based on individual circumstances.


Assets Under Management (AUM) refers to the total market value of all financial assets that a financial institution, such as a private bank, manages on behalf of its clients. These assets can include various investment instruments such as stocks, bonds, real estate, and other financial products.

Margin call.

A margin call is a demand from a brokerage or lender for an investor to deposit additional funds or securities into their margin account. This request is typically triggered when the value of the investor’s securities, held in the margin account, falls below a certain level, known as the maintenance margin.

When dealing with a private bank, the AUM concept is particularly relevant. Clients entrust their wealth to the private bank for management, aiming to grow and preserve their financial portfolios: however, remain at risk to market fluctuations and suitable only for high-net-worth individuals.

Buy-to-Let (BTL) Mortgage.

Designed for landlords aspiring to acquire a property for rental purposes, a Buy-to-Let (BTL) mortgage caters specifically to the unique needs of property investors looking to generate income through renting out their acquired property.


Capital denotes the principal amount borrowed, excluding any additional interest payments. It forms the basis of the loan amount and represents the initial financial commitment from the borrower.


The deposit refers to the initial sum of money required for a property purchase before securing a mortgage. A higher deposit amount equates to a reduced need for borrowing through the mortgage, providing financial flexibility for the borrower.

Early Repayment Charges.

These charges come into effect if a borrower opts to settle or overpay their mortgage before the agreed-upon interest rate period concludes. They are particularly relevant in the context of fixed-rate mortgages, where deviations from the agreed-upon terms may incur additional charges.


Libor, or the London Interbank Offered Rate, serves as the fundamental interest rate for interbank lending in London. It is also used as a reference for setting interest rates on various loans.

Valuation Fee.

A valuation fee is charged by lenders for assessing the value of a property intended to be used as security for the mortgage. This fee contributes to the lender’s evaluation process, ensuring the property’s worth aligns with the mortgage amount requested by the borrower.

Trust in Fortier Finance to be your knowledgeable ally on your journey through the mortgage process. We are here to ensure that you not only secure the right mortgage but also develop a solid understanding of the terminology involved, fostering financial literacy and confidence in your decision-making.