Term: The mortgage term is the length of time over which a mortgage loan must be repaid.
Term Assurance: A form of life assurance. The insured individual is covered against death within a fixed period of time, depending upon the payment of the insurance premiums. If the insured dies within the policy term the sum assured is paid out to a nominated benificiary. If the insured person survives the agreed term of the premium, the insurance ends with no money being paid to the policyholder.
Terminal Bonus: A bonus paid at the end of an endowment mortgage. The amount paid out depends on the performance of the investment fund being used to repay the mortgage.
Tied Agents: Advisers and agents that have access to mortgages not normally found on the high street. They may be associated with a particular financial organisation or estate agent and are not, therefore, fully independent.
Top Up Loan: A type of second mortgage, used to provide an overall loan in excess of the loan to value ratio allowed by the primary lender. Top up loans will invariably be charged at a higher rate than the first mortgage.
Tracker Mortgages: This type of mortgage follows the Bank of England Base Rate, or the lender’s Standard Variable Rate (SVR), plus or minus a given percentage. For example, if a two-year tracker mortgage has a rate equal to the Base Rate plus 0.5%, if the Base Rate is 4.5%, interest rate on the mortgage will be 5.0%. If the Base Rate drops to 4.0%, the tracker mortgage rate will fall to 4.5%. If the mortgage tracks the lender’s SVR it may not necessarily change in line with the Base Rate. It is also possible to obtain mortgages that track other rates, such as LIBOR (London Interbank Offered Rate; the rate at which banks lend money to each other), but these products are less readily available.