APRC shows you, as a percentage, the annual cost of your mortgage over its lifetime. It brings together all the charges (such as fees) plus the interest rate on your initial deal and the interest rate you’ll be charged when your deal expires.


Your plan would pay out should you suffer an injury or sickness that prevents you working in any occupation including those that may not be your usual job.


A bare trust is a basic trust in which the beneficiary has the absolute right to the capital and assets within the trust, as well as the income generated from these assets.


Critical illness cover is a type of insurance that pays out a tax-free lump sum if you're diagnosed with a critical illness that meets the policy definitions during the policy term. The policy does not cover every illness, and illnesses that are covered may have limits regarding how severe the illness must be to make a claim.


Debt consolidation is the act of taking out a single loan to pay off debts.  You can use a secured or unsecured loan for a debt consolidation.


This is generally the cheapest form of life cover. The sum assured decreases each year that the life assured lives, usually on a fixed scale, until at the end of the term the amount is zero.


This is the period of time you are prepared to wait before your income protection policy starts to pay out if you make a claim. You can choose your deferred period when you take your policy out – you can usually choose from as little as 1 day up to 52 weeks. Some policies may allow even longer than 52 weeks.

Discounted Rate

A discounted mortgage is a mortgage where the interest rate is set a certain amount below the lenders Standard Variable Mortgage rate (SVR).  This could be for either a set period or the whole of the mortgage term.  The SVR is the interest rate set by your lender, which it can raise or lower by any amount, at any time.  However, a discounted mortgage is a type of variable-rate mortgage meaning the amount you pay could change from month to month.


A trust in which the trustees have the discretion to decide how much to pay out, to who and when to pay. This is often used where the beneficiaries are too young to deal with their own money.


This is a charge made by a lender if you repay all your mortgage or part of it before the date at which the initial deal ends. The amount of the charge can be found on your illustration and will vary depending on how early in the term you make the repayment.


Family income benefit is a type of life insurance policy that pays out a regular monthly income (rather than a lump sum) to your family if you die within the term of the policy. The monthly income is paid for the remainder of the policy term.

Fixed Rate

This is a mortgage where the interest rate is fixed at the start of the term for a period of years. During that time the monthly payment will not change providing you do not miss any of the payments or pay less than the amount due to the lender.


Fracture cover is there when your customer has an unexpected injury, like a slip on the stairs, car crash or a fall outdoors.  It’s there to help with extra costs an injury can cause, such as childcare, travel costs or equipment for mobility.


A guarantor mortgage (also known as a family-assisted mortgage) is a mortgage deal where another person agrees to take on responsibility for your repayments in the event that you can’t pay. That person is known as the ‘guarantor’ and is usually a family member or close friend of the mortgage applicant.


Income Protection pays out a monthly sum to replace part of your income if you are unable to work due to illness or injury. It continues to pay out until you have recovered or until your retirement, your death, your policy ends or the limited claim period on your policy ends (whichever is sooner).


Increasing term insurance, also known as index-linked life insurance, is a term life insurance policy that keeps on rising in value over time. The increasing term insurance helps your policy maintains its buying power and doesn’t erode in value due to inflation.


Indexation is a facility offered by many life insurance providers which helps you to maintain the buying power of the potential benefits payable.  With indexation, normally the premiums (and therefore the benefits payable) are linked to one of the indicators of inflation.  This means that your premiums may increase over time but the benefits you could receive if you claimed will also increase.

Interest Only

When you take out an interest-only mortgage, your monthly payments pay back the interest on what you’ve borrowed, rather than the sum itself.

At the end of the term, you pay back the full amount outstanding in one lump sum.


LTA (level term assurance) is an insurance policy that provides a set sum assured (the amount of money your beneficiaries will receive upon your death) if you die within a defined period (the term). The word level is used because the sum assured remains the same. The word term is used because the policy covers you for a set length of time.


Insurance that pays out a sum of money on the death of the person insured. The policy is usually taken out for a set number of years (the term of the policy). After that the policy ends and no money would be paid out if the insured person dies after the policy ends.


LTV or Loan-to-Value is a ratio of the size of your mortgage loan compared to the value of the property and expressed as a percentage.


An offset mortgage is a type of mortgage that is linked to a savings account taken out with the lender. The money in your savings isn’t used to pay off your mortgage. Instead, it’s used to lower the total interest you’ll be charged on your repayments each month.

This can either make your mortgage repayments cheaper or reduce the term of your mortgage, but you won’t earn any interest on those savings your mortgage is ‘offset’ against.

Lenders ‘take away’ the amount in your savings account from how much you owe on your mortgage. You’ll only pay interest on what’s left.


Your plan would pay out should you suffer an injury or sickness that prevents you working in your own occupation.


This feature allows you to move the product you currently have over to a new property if you move house. The interest rates and monthly payments will remain the same after the house move although any additional money you borrow to purchase your new home will be subject to the rates and lending criteria available at the time you apply for the mortgage to be ported.


Private Medical Insurance (PMI) is designed to cover the cost of private medical treatment for acute conditions that start after your policy begins. It may cover a range of different options including choice of hospitals, diagnostic tests and outpatient care.


A product transfer mortgage is a remortgage with your current mortgage lender. It involves switching to a new mortgage deal with them when your current deal runs out.


Remortgaging is the transfer of a mortgage from one lender to another. You continue to live in the same house, but your monthly payments are made to a different lender. The purpose of Remortgaging is often to obtain a more favourable interest rate when your current deal has expired, but it may also be used to raise additional funds – for home improvements, to repay other debts etc.

Repayment Mortgage (Capital & Interest)

A capital and interest mortgage (often called a Repayment Mortgage) is the most common type of mortgage being offered at the moment. With this type of mortgage, you’ll make monthly repayments for an agreed period of time (known as the ‘term’ of the mortgage) until you’ve paid back both the capital and the interest.

This means that the amount you owe will get smaller every month and, as long as you keep up the repayments, your mortgage will be repaid in full at the end of the term.

Standard Variable Rate (SVR)

A Standard Variable Rate (also known as Standard Mortgage Rate or SMR) is the standard interest rate offered by a mortgage lender. It’s the rate your mortgage reverts to after the end of the initial deal unless you chose another deal with the lender or remortgages to a new lender.


Many life insurance policies include terminal illness benefit. This means the insurer would pay out if you’re diagnosed with a terminal illness within the policy term and aren't expected to live longer than 12 months. Once the terminal illness benefit has been paid, the life insurance policy ends, and won’t pay out when you die.


This cover is commonly offered on life insurance and critical illness insurance policies. It pays out an agreed sum of money if you have an illness or injury that means you’re permanently incapacitated.


A tracker mortgage is a type of variable rate mortgage. It follows the Bank of England base rate during a specified period, so your repayments can vary – go up or down.

The interest rate you pay on tracker mortgages is variable and is an agreed percentage above the Bank of England's base rate. As the base rate rises and falls, your interest rate will track these changes, and this will affect your monthly payments accordingly.


A trust is a legal agreement which enables the ‘settlor’ (the person setting up the trust) to specify what happens with the proceeds from their insurance policy. Trustees are appointed and they ensure that any money paid out from the policy goes to the people you would want it to go to (your beneficiaries).


This is an additional benefit which can be added to your cover for an additional cost. It ensures your insurance remains intact if you become incapacitated by illness or injury and are unable to pay your monthly premiums.


Whole-of-life insurance is life insurance that covers you for the entirety of your life, rather than for a set term. It means your family will receive a pay-out however long you live, as long as you keep paying the premiums.