Your quick guide to home buying jargon

If you’ve never bought a home before, don’t be surprised if you come across some unfamiliar words and phrases and realise you’re not sure what they mean.

In a 2022 survey, conducted by Skipton, of 2,000 homeowners who had bought in the last 20 years, 54% admitted to being confused by certain aspects when it came to buying their first home. Of them, 8 out of 10 said they were too embarrassed to ask things like ‘What is stamp duty?’, ‘What is conveyancing?’ and ‘What’s the difference between a mortgage Decision in Principle and a mortgage offer?’.

60% felt overwhelmed talking to estate agents, solicitors and mortgage advisors. Often property professionals can just assume that you know what they’re talking about but would you know your LTV from your APRC, especially when you’ve never come across them before?

The good news is, we’re here to guide you through.

With the help of our in-house mortgage advisers, we’ll explain all of the above, and many more phrases you’re likely to come across on your home buying journey, from checking how much you could afford to borrow on a mortgage to the day you move in. It’s just one of the ways that Skipton Building Society could help on your property purchase adventure, including advising on a range of mortgages suitable for first time buyers.

Setting a budget

The very first step towards getting on the property ladder should be to get an idea of just how much you may be able to borrow. So here are some of the phrases you may come across when you’re trying to get this information.

Affordability check

This is an estimate of how much you might be able to borrow based on your salary. You can carry it out using an online tool like this calculator. This is very much a ballpark figure as several other factors will also dictate how much a lender is likely to offer you.

Decision in Principle (DIP)

Sometimes also known as an Agreement or Mortgage in Principle (AIP or MIP), it gives you an idea how much you could borrow from a lender. It’s worth knowing that many estate agents will insist on seeing evidence of yours as an assurance before they'll put your offer to the seller. We’re here to help make the process of getting a Skipton DIP as simple as we can, so you can request one online.

Credit check

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. The companies that provide these checks will give you a credit score. Generally the higher this number is, the more likely that you’ll be accepted for credit but some lenders can have different scoring systems.

Soft and hard footprints

Each time your credit is checked it leaves a so-called footprint. These are split into the soft and hard footprints. The former is only visible to you. Lenders won’t see it and it will not affect your credit score. A hard footprint leaves a record of the search on your credit file and having many of these over a limited time period can negatively affect your credit score. This may make it harder for you to obtain credit in the future.

Chris's quote

A hard footprint will enable other lenders/financial institutions to see how many searches are on your credit file. If there are a lot, this could have an impact on your ability to get a mortgage

Chris - Mortgage Adviser

Searching for your first home

When looking for a home, property listings can often be full of unfamiliar words and phrases that you may not be familiar with at all. Here are just a few key ones which are the most often misunderstood.

Freehold and leasehold property

In a freehold property you own both the property itself and the land that it stands on and there is no time limit to your period of ownership. This generally relates to houses. In a leasehold property you own the building but not the land and a lease defines the fixed period during which you can live in it. Possession of the property will be subject to the payment of an annual ground rent. It can be any period up to 999 years but for properties in which there are fewer than 70 years left on the lease it may be hard to get a mortgage. Flats tend to be leasehold properties.

Ground rent and service charges

If you are a leaseholder, these are additional charges that, as a leaseholder, you may have to pay the owner of the freehold or for the upkeep of common areas. Ground rent is rent that you pay to the landlord or freeholder, usually on an annual basis. Service charge is the payment for all services, such as maintenance of gardens and communal areas of the property, which you'll use but you are not specifically responsible for.

Finding a mortgage

With so many options available it could be a good idea to come to Skipton Building Society. After all, we’ve been helping people to own their own homes since 1853 and could help you find a mortgage from our range that is suitable for you. And as you can see, we also explain everything in plain English.

Umera's quote

If you come to Skipton for your mortgage, you will have a dedicated mortgage adviser who will be here to help you through every stage of your mortgage journey. They will understand your income, outgoings, future plans and essentially what you are looking to achieve from your mortgage. Our qualified mortgage advisers then make a recommendation for a Skipton mortgage which is best suited for you

Umera - Mortgage Team Manager

Fixed, variable and tracker rate mortgages

Lenders like us offer different kinds of mortgages. As the name suggests, a fixed rate mortgage has a rate that stays the same for a specified period of time.

A variable rate mortgage has a rate that can rise and fall at any time. The rate is varied at the discretion of the lender and is not directly linked to an independent external rate such as the Bank of England Base Rate.

A tracker rate mortgage is directly linked to changes of an independent external index such as the Bank of England Base Rate, which can rise and fall.

Bank of England Base Rate

This is the interest rate which is set on a monthly basis by the Monetary Policy Committee (MPC) of the Bank of England and is the rate that it charges for its borrowing. If the rate changes, it could impact variable or tracker (if used as an index) interest rates.


Annual Percentage Rate of Charge is an indicative guide to help you compare the cost of different mortgage deals, taking account of interest rates payable (both during the initial product period and after) and fees.


The Loan To Value is the proportion of a 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.

Government schemes

There are a range of different government schemes that can help you get onto the property ladder. Some of the schemes available now are Help to Buy, Shared Ownership and First Homes England. You’ll find more information about all these schemes and more on our Government schemes page.


In some circumstances a lender will ask for a guarantor. This is usually a family member who undertakes to pay your monthly mortgage repayments if you aren’t able to meet the commitment yourself. We don't currently offer guarantor mortgages at Skipton.


Underwriting is when a mortgage lender works out how much risk they would be taking by lending you money. They’ll check your income, assets and property details before deciding whether to make you a mortgage offer.

Mortgage Offer

A mortgage offer is a formal document confirming that your lender is happy to lend you an agreed amount of money. You’ll only receive a mortgage offer after you’ve successfully completed the application process, your lender has assessed your financial situation and valued the property you want to buy.

Buying your property

Now you’ve found your dream home and arranged your mortgage. It’s time to complete the legal process of buying a house. Here are some of the key phrases you need to know to cut through the legal jargon.


Conveyancing is the legal process involved in transferring a property from one owner to another. It’s carried out by a conveyancer or solicitor who acts on behalf of the buyer - beginning when your offer on a house is accepted and ending when final contracts are signed and the money to complete the purchase has been transferred.

Chris's quote

A conveyancer is normally a solicitor who acts on behalf of the buyer and lender in the legal process of buying a property. Fees are charged by them, for which the buyer is responsible

Chris - Mortgage Adviser

Stamp Duty Land Tax

England and Northern Ireland

This is a tax that’s payable to the government when you buy a property. The amount you pay depends on the purchase price of the property but for first time buyers there is currently no stamp duty land tax payable on properties costing up to £300,000 (unless the property is a buy-to let). If you are buying with someone else, both people must be first time buyers for this to apply.


In Scotland you pay Land and Buildings Transaction Tax (LBTT), which is similar to stamp duty in that the rates are tiered. First-time buyers don't have to pay LBTT on the first £175,000 of the property. Home movers pay LBTT on property prices from £145,001 as long as it is your only property.


In Wales you’ll have to pay Land Transaction Tax (LTT) on properties over £180,000 whether it’s your first property or not (different rates may apply for second properties). It’s another tiered system like stamp duty, so the cost will depend on how much your property costs.


Property searches are the enquiries your solicitor makes to find out more information about the property you want to buy. They’re important because they can flag up key facts and help you decide if it’s the right house for you. For example, searches can show if any planned future developments might change the view from your window, whether there’s been any problems with flooding and or if you’re at risk from landslips or subsidence.

Exchange of Contracts

This is the moment when you exchange the legal agreements to buy or sell a property. At this point you are legally bound to go ahead with the purchase or sale. In Scotland this stage is known as Conclusion of Missives.


Your lender releases the mortgage money to the conveyancer who transfers it to the seller’s representative and it’s time to move in. This is the day when you finally achieve your aim of being a property owner.

The steps in the house buying process in Scotland are slightly different to England and Wales. Download our guide to house buying in Scotland [PDF] and guide to house buying in England and Wales [PDF] to find out more.

Of course, we've only explained here some of the many phrases that you may come across. We hope you find this jargon-busting guide helpful on your home buying journey. Don’t worry about it being a lot to remember because we’ve teamed up with Babbel the language specialists to create a handy downloadable guide that you can use on the go. And if you come across any other jargon you’re not sure about, just ask.

From home-buying jargon to applying for your first mortgage, the team at Skipton Building Society are here for you.

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

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