First-home glossary
You do not need to learn a new language to buy a home. Find a short explanation, then follow the guide for the next practical step.
Last updated · England
Mortgage
A loan secured on your home. If you do not keep up repayments, your home may be repossessed.
Put this into contextGross income
Income before tax and other deductions. It is different from the amount reaching your bank account.
Put this into contextTake-home pay
Income after tax and other deductions. Use it alongside actual spending when planning monthly life after moving.
Put this into contextAffordability
Whether the borrowing and ongoing costs fit your circumstances. A deposit percentage or salary multiple alone does not establish it.
Put this into contextLoan-to-value (LTV)
The mortgage as a percentage of the property price. On a £180,000 home, a £171,000 mortgage is 95% LTV, leaving a £9,000 deposit.
Put this into contextAgreement or decision in principle (AIP/DIP)
An initial indication of possible lending, subject to checks. It is not a full mortgage offer or a guarantee about a particular property.
Put this into contextEquity loan
Extra borrowing alongside a mortgage. Read the actual scheme’s repayment formula, later charges and restrictions; do not treat it as a gift.
Put this into contextNegative equity
When the mortgage is larger than the home’s value. This can make moving or changing lender more difficult.
Put this into contextConveyancing
The legal work involved in transferring the property. A solicitor or licensed conveyancer handles this work and raises legal questions about the purchase.
Put this into contextMortgage valuation
A lender’s check of the home’s value as security for its loan. It does not replace a condition survey commissioned for the buyer.
Put this into contextSurvey
An inspection of the home’s condition. The appropriate survey depends on the building and what you need to investigate.
Put this into contextExchange of contracts
The stage when the purchase contracts become legally binding. Ask your conveyancer to explain the commitments and deposit arrangements before authorising it.
Put this into contextCompletion
The point when the purchase money is transferred and ownership changes. It is distinct from having an offer accepted or exchanging contracts.
Put this into contextLifetime ISA (LISA)
A savings or investment account with a government bonus and conditions on withdrawals. The account rules and home-price cap can affect whether it suits your first purchase.
Put this into contextStamp Duty Land Tax (SDLT)
The property-purchase tax used in England. Relief depends on the transaction and buyer conditions.
Put this into contextQuestions you might be asking
Do lenders and schemes use the same first-time-buyer definition?
Not always. A tax relief, savings-account withdrawal and lender product can have different ownership conditions, so check the rules of each one separately.
Is an agreement in principle a mortgage approval?
No. It is an initial indication, subject to further checks and the property. A full mortgage offer is a different stage.
Does a mortgage valuation replace a survey?
No. A lender’s valuation concerns security for its loan, while a survey investigates the home’s condition for you.
Sources
Original information checked 28 October 2026. Lender criteria and government plans can change.