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Abacus-money Jargon

E

Early Repayment Charge (previously Known As 'Early Redemption Penalty')

A financial penalty for repaying part or all of the mortgage before an agreed date. It is often applied to mortgage schemes that are either fixed, capped or cash-back types. Quite simply, the lender agrees to offer what it believes is an exceptional package of benefits, providing the borrower agrees to keep the mortgage with them for an agreed length of time. Some lenders, and some scheme types, have no early redemption penalties at all. These are definitely worth looking into.

Endowment

A savings plan with built-in life assurance that can be used as the repayment vehicle on an "interest-only" mortgage. Some policy holders have received notification that their policy may not mature with sufficient value, and as a result either switch to a repayment mortgage, or part endowment and part repayment. We cannot give advice in respect of these policies.

Equity

The difference between the amount you owe on your mortgage and the current value of your property.

Estate

A legal term referring to the sum total of all the property and personal assets owned by an individual at the time of their death.

Exchange Of Contracts

This is the point at which the respective solicitors swap contracts agreeing the price, fixtures and fittings, and completion date for the move. Everything is now legally binding. The buyer is now responsible for the new properties buildings insurance and, if either the buyer or seller withdraw, compensation will have to be paid.

Expatriate

A person working in a country that is neither their country of birth nor nationality.

Extended Tie-Ins

This is where the early redemption penalties apply even after the scheme date has finished. It means, in effect, that the lender, in exchange for what it believes is an exceptional scheme, requires the borrower to keep the mortgage with them after the scheme has ended, for a set period of time, i.e. "fixed rate for two years with an early redemption period of five years."