Jargon Reference Guide



 

Early Redemption Charge (ERC)


A charge made by the lender if the borrower terminates a mortgage in advance of the terms of that particular mortgage. This usually occurs when the borrower has benefited from reduced payments or cash back in the early period of a mortgage.

Endowment Mortgage


Interest-only repayments combined with monthly premiums into an endowment policy designed to pay off the loan at the end of the term.

Equity


The difference between the value of a property and the amount of mortgage owed.

Excess


The initial sum paid on an insurance claim.

Exchange of Contracts


The point at which signed contracts are physically exchanged, legally committing the buyer and seller to the purchase and sale of a property at an agreed price.