glossary of terms
Early Redempltion Penalties
Mortgages commonly carry early redemption penalties which can in some cases persist long after the initial special rate itself has expired. This can make it prohibitevely expensive to move to a rival lender in the first few years of the loan.
Earnings Limit (Lower)
The minimum level of earnings which must apply in order for National Insurance Contributions to be payable by an individual
Earnings Limit (Upper)
The maximum level of earnings on which National Insurance Contributions are payable
Eligibility Date
The date at which an individual becomes eligible for benefits
Endowment
A life assurance policy related to a mortgage designed to pay off the amount originally borrowed at the end of the mortgage term. An endowment policy will pay you a fixed amount on a set date or if you die before that date, in other words it's both a way of saving and life insurance. People often use endowments to repay interest only mortgages. The drawback of them is that it is often unclear how much you are having to pay in charges and the plans are often very rigid, so if you start an endowment and then decide to cancel it, you might not get back what you paid in.
Endowment Mortgage
You only pay interest to the lender, but you also have to pay a monthly premium for an endowment policy that you take out with an insurance company. The endowment policy is designed to produce a lump sum either at the end of your mortgage term or at your death if earlier, to repay the capital you borrowed. You must remember though that the amount paid out is not guaranteed and may not be sufficient to repay the capital borrowed.
Equities
Another word for stocks and shares
Equity
The amount by which the value of a house exceeds the total of the loans secured by mortgages
Equity Release
A type of remortgage where you own your home outright but wish to use it as security for new borrowing
Escalation
Refers to the increase in benefit (usually annual) payable during the payment term of an insurance claim that is not settled via a lump sum payment. For example, claims under an Income Protection Policy might escalate annually in line with the Retail Price Index
Estate
Strictly, an interest in land, but generally used to mean the total (land, chattels, investments, etc) owned by an individual
Exchange of Contracts
Where a customer buys a financial product without receiving advice on its suitability
Execution Only
Where a customer buys a financial product without receiving advice on its suitability.
Experience Rating
Process of determining the premium rate for a group risk, wholly or partially on the basis of that group's claims experience to date
Express Money Transfer
This is a foreign currency payment to an individual or organisation delivered electronically to a bank. It takes around 2-5 days, depending on the currency and destination.
