Glossary
AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
Annual Percentage Rate. This is a figure which all lenders must quote when referring to mortgages. It is designed to show the total yearly cost of a mortgage stated as a percentage of the loan. It includes items such as the interest rate paid at the start of the mortgage, application fee, valuation fee and other charges commonly paid at the end of a mortgage. It is the overall cost for comparison purposes. This figure is intended to help customers to compare the overall cost of different loans.
The rate at which the Bank of England lends to other financial organisations, which effectively controls interest rates throughout the UK. The Bank of England Base Rate is currently 0.50%.
Financial Services Authority. The FSA is an independent body that regulates the financial services industry in the UK.
Gross interest means the rate of interest payable before the deduction of income tax at the rate specified by law (the “specified rate”). The current specified rate for basic rate tax payers is 20%. Please note you may be liable to pay tax at a higher rate depending on your tax position and that tax position may change.
Loan to Value. A percentage ratio of the outstanding loan on a property against the market value of that property.
Net interest is the rate of interest which would be payable after deduction of income tax at the specified rate.
Standard Variable Rate. SVR is the Society's base mortgage rate, which is determined by us after considering market factors. If the interest rate applying to a mortgage is linked to SVR then the interest rate and payment will change when SVR is changed.
Tax-free interest is the rate of interest payable where interest is exempt from income tax.