It’s often said money talks but what it says can be a total mystery to some of us! So for those days when you just want something in plain English, we’ve compiled a straight talking A-Z of everyday financial terms.
By Caroline Bloor
The APR or Annual Percentage Rate is an easy way to compare the cost on different credit offers and loan on a like for like basis. It’s not perfect but it’s a benchmark taking into account all costs, interest charges and arrangement fees.
The rate at which the Bank of England lends money to other banks. This influences the borrowing and savings rates of our lenders and banks.
It pays the cost of repairing or rebuilding your home if it is damaged by unpredicted events.
A tax on increase in value of an asset (such as shares, second homes, and works of art) since you bought it. You pay it when you sell the asset.
Whatever interest rates do generally, the interest rate you are charged on this type of mortgage will never rise above a certain level during its capped period.
Every time you apply to open an account where you can borrow money, banks check up on your financial history and status with one (or more) of three organisations –Callcredit, Equifax and Experian.
Scoring systems devised by lenders to help them work out whether to lend you money or not. (You don’t have one ‘credit rating’. Each lender uses its own criteria to make up its mind about you).
It covers the cost of replacing your property’s contents and personal possessions when lost or damaged due to unforeseen events.
A legal decision awarded against you that orders you to pay a debt.
A type of mortgage that combines your mortgage with your current account. As your salary is paid directly into the account, it automatically decreases the mortgage debt and so the interest payable too. Any other savings or debts can be transferred to the account. Typically you pay the same interest rate on the lot.
For more on mortgages, go to our Mortgage pages
For more on property, buying and selling and finances, go to our Property & Money pages
Check out the mortgage calculator, loans, credit cards & savings comparison tools
Compare current rates on loans, savings accounts, credit cards & mortgages with this handy tool
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