A–Z Glossary of UK Expat Mortgage Terms

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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

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A

Additional Dwelling Surcharge

In England and Northern Ireland, the additional dwelling surcharge is a higher-rate Stamp Duty Land Tax charge that applies when someone buys an additional residential property, such as a second home or buy-to-let, unless an exemption applies. The surcharge is currently 5%, having increased from 3% with effect from 31 October 2024. It sits on top of the standard SDLT bands and is separate from the non-resident SDLT surcharge, although both can apply to the same purchase.

Affordability Assessment

Affordability assessment is the lender's process of deciding whether a borrower can realistically maintain the mortgage payments. It usually considers income, committed expenditure, credit profile, and stress-tested affordability at a higher assumed interest rate. Specialist overlays often apply for buy-to-let, expat, and foreign national cases. Affordability assessment is not the same as a simple income multiple, although the income multiple often sits within the wider calculation.

Agreement in Principle (AIP)

An Agreement in Principle is an early indication from a lender of how much an applicant may be able to borrow, based on basic financial information and sometimes a credit check. It is not a formal mortgage offer, but it can help show estate agents and sellers that an applicant is in a position to make an offer. Lenders may use Agreement in Principle, Decision in Principle, and Mortgage in Principle in slightly different ways.

Arrangement Fee

An arrangement fee, sometimes called a product fee, is a charge made by some mortgage lenders for setting up a particular mortgage product. It can be paid upfront or added to the loan, with implications either way. A fee-paying product is not automatically more expensive than a fee-free version, because the rate and the fee work together to determine the total cost over the deal period.

Asset-Based Mortgage & Lombard

Asset-based mortgage is a broad label used for lending where the borrower's assets play a major role in the credit decision instead of standard salary-led affordability alone. In UK practice, the phrase can refer to private-bank residential mortgages, securities-backed (Lombard) facilities, or other asset-led structures. Despite the name, not every structure described this way is a regulated mortgage, and some are not mortgages at all. It is an umbrella label rather than a single standard product.

B

Beneficial Interest

Beneficial interest refers to a person's underlying economic interest in a property, which can be different from the name or names shown on the legal title. It often becomes relevant where two or more people contribute unequally, hold property as tenants in common, or record their arrangements through a deed of trust. Beneficial interest is a separate concept from mortgage liability and from registered legal ownership, as covered in Practice Guide 24.

Bridging Loan

A bridging loan is a short-term loan designed to provide temporary funding, usually until a property is sold, refinanced, or moved onto a longer-term mortgage. It is commonly used where timing is tight, such as buying before a sale completes or funding a property that is not yet suitable for a standard mortgage. Some bridging loans are regulated and some are not, depending on the property and how the loan is being used, so bridging is not a single regulatory category.

Broker Fee

A broker fee is a charge paid by the borrower directly to a mortgage broker for arranging the mortgage, separate from any payment the broker receives from the lender. Charging models vary across the market: some brokers charge a fixed fee, some charge a percentage, and some charge no client fee at all. A broker is required by FCA rules to disclose its charging arrangements clearly.

Buy-to-Let Mortgage

A buy-to-let mortgage is a mortgage for a property intended to be let to tenants rather than occupied by the borrower as their own home. Lenders typically assess these mortgages differently from residential mortgages, often focusing on rental income, applying stress testing, and assessing the borrower's wider profile under the PRA SS13/16. Buy-to-let lending is materially different from a residential mortgage with tenants in it.

C

Completion

Completion is the legal stage at which ownership of a UK property formally transfers from the seller to the buyer. The mortgage advance and any remaining purchase funds are paid through the conveyancers, the keys are released, and the buyer takes legal possession. Completion is a separate stage from

Consent to Let

Consent to let is permission from a residential mortgage lender allowing the borrower to rent the property out temporarily without immediately switching to a buy-to-let mortgage. It is typically subject to lender conditions and time limits, and it is not the same as converting the loan permanently into a buy-to-let mortgage. Lender policies on consent to let vary considerably across the market.

Consent to Mortgage

Consent to mortgage is a written agreement signed by an adult occupier of a property who is not on the mortgage itself, postponing any rights they may have to the lender's charge. It is typically requested by lenders during purchase or remortgage where someone other than the named borrower lives in the property. Consent to mortgage is not a borrower-only document and is usually managed through the conveyancer.

Contractor Mortgage

A contractor mortgage is a mortgage assessed using contractor income rather than only standard salaried or self-employed criteria. In practice, some lenders use day rate, contract value, or fixed-term contract income to assess affordability, which can change the case materially compared with conventional PAYE or accounts-based lending. Contractor mortgage typically refers to a specialist underwriting approach rather than one standard product type.

Conveyancer

A conveyancer is a legal professional authorised to carry out the property-transfer work involved in buying, selling, or transferring ownership of property. In practical consumer use, the term often covers both solicitors and licensed conveyancers who handle title checks, contracts, registration, and completion. Although the two roles overlap heavily for property transactions, they sit under different regulators in technical terms.

Country of Residence

Country of residence is the country where the borrower is living when they apply for the mortgage. For expat and foreign national lending, this is often a core eligibility factor because some lenders only accept applications from residents of approved countries or regions. Country of residence can also affect documentation, regulatory handling, and the lender's overall appetite for the case.

Country Restrictions

Country restrictions are lender policy rules that limit which countries an applicant's residence, employment, or income can come from for a given mortgage product. Some lenders publish approved-country lists; others restrict by region or assess case-by-case. Country restrictions are policy rules adopted by individual lenders, not a legal ban on owning UK property, and country lists differ considerably across the specialist market.

Credit Score

A credit score is a numerical summary produced by a credit reference agency to reflect information held on a person's credit file. Mortgage lenders do not all rely on the same consumer score or use it in the same way. In mortgage underwriting, the wider credit history, such as repayment behaviour, credit utilisation, and any adverse events, usually carries more weight than any single consumer-facing number.

D

Decision in Principle (DIP)

A Decision in Principle is a lender's provisional view of how much an applicant may be able to borrow before submitting a full mortgage application. Many lenders use Decision in Principle, Agreement in Principle, and Mortgage in Principle as closely related terms, although the exact process can vary. A DIP can be useful when viewing properties, although the credit check approach (soft search or hard search) varies between lenders.

Deed of Trust

A deed of trust, often called a declaration of trust, is a legal document that records how beneficial ownership in a property is held and how sale proceeds are divided. It is commonly used where co-owners contribute different amounts to the deposit or where family members provide financial support without taking legal title. A deed of trust does not by itself change the registered legal title of the property.

Deposit

A deposit, in a UK property purchase, usually means the part of the purchase price the buyer contributes from their own funds rather than borrowing. The total deposit is generally paid through the conveyancer, with a portion paid earlier at exchange of contracts. The exchange deposit and the total property deposit are not always the same amount, depending on what is agreed.

Deposit from Abroad

Deposit from abroad refers to a mortgage deposit funded from money held outside the UK, such as overseas savings, a foreign property sale, or a family gift sent from overseas. Many lenders can accept it, although they typically require clear source-of-funds evidence, bank statements, and sometimes proof the funds have been transferred into a UK account. Anti-money- laundering checks generally apply at multiple points.

Down Valuation

A down valuation occurs when a lender's valuer assesses a property at less than the agreed purchase price, which can affect the loan amount, the loan to value, and sometimes the transaction itself. A down valuation is the lender's lending valuation rather than a definitive market verdict, and the buyer typically has options including renegotiation, additional deposit, or a fresh valuation through a different lender.

E

Early Repayment Charge (ERC)

An Early Repayment Charge, often shortened to ERC, is a fee that may apply when a borrower repays all or part of a mortgage during a specified period, such as the initial fixed-rate period. The charge is typically calculated as a percentage of the amount repaid, with the percentage often stepping down over time. Not every mortgage carries an ERC, and the rules depend on the specific deal terms.

Exchange of Contracts

Exchange of contracts is the legal stage in a UK property transaction at which the buyer and seller become contractually committed to the purchase, usually after searches, mortgage offer, and key checks have been completed. The buyer typically pays an exchange deposit at this point, often (but not always) 10% of the purchase price. Exchange is a different event from completion, although the two can occasionally happen on the same day.

Expat Buy-to-Let

Expat Mortgage

An expat mortgage usually refers to a mortgage for a British national living outside the UK who wants to buy or remortgage UK property. Lenders often treat these cases as specialist because income may be paid in a foreign currency, documents may come from overseas, and credit footprint patterns can differ from a typical UK resident. The label overlaps in practice with non- resident and foreign national mortgages, although the categories are not identical.

Expat Remortgage

An expat remortgage is a remortgage on a UK property where the borrower is living abroad at the time of the application. It may be used to switch rate, raise capital, or move a property onto a different mortgage basis. Lenders often assess these cases through specialist criteria because overseas residence, foreign income, and cross-border documentation can change how affordability and risk are evaluated.