UK Financial Glossary
Last verified · Methodology
Fifteen essential UK financial terms explained in plain English. From stamp duty and ISA to PAYE and leasehold, each definition includes a worked example and a link to the relevant free calculator.
Mortgages and Property(9)
Loan-to-Value (LTV)
The ratio of your mortgage amount to the property value, expressed as a percentage. Lower LTV usually means better mortgage rates.
Try the UK Mortgage Calculator→Fixed-Rate Mortgage
A mortgage where the interest rate is locked for an initial period (commonly 2, 3 or 5 years) regardless of Bank of England base rate changes.
Try the UK Mortgage Calculator→Variable Rate Mortgage (SVR)
A mortgage where the interest rate can change at any time, usually tied to the Bank of England base rate or the lender's SVR.
Try the UK Mortgage Calculator→Interest-Only Mortgage
A mortgage where monthly payments cover only the interest charge; the capital borrowed must be repaid separately at the end of the term.
Try the UK Mortgage Calculator→Buy-to-Let Mortgage
A mortgage designed for properties purchased as rental investments, with different lending criteria and typically higher rates than residential mortgages.
Try the Stamp Duty Calculator→Shared Ownership
A government-backed scheme letting buyers purchase a share (10-75%) of a property and pay rent on the remaining share owned by a housing association.
Try the UK Mortgage Calculator→Help to Buy
A government equity loan scheme (closed in England 2023, still active in Wales) providing up to 20-40% of a new-build property price interest-free for 5 years.
Try the Help to Buy Calculator→Freehold vs Leasehold
Freehold means you own the property and land outright. Leasehold means you own the property for a fixed number of years under a lease from the freeholder.
Try the Stamp Duty Calculator→Ground Rent
An annual charge payable by a leaseholder to the freeholder, separate from service charges, for the land on which the building stands.
Try the UK Mortgage Calculator→Tax(2)
Stamp Duty Land Tax (SDLT)
A tiered tax paid by property buyers in England and Northern Ireland, calculated on the purchase price.
Try the Stamp Duty Calculator→Council Tax
A local authority tax on domestic properties in the UK, charged by band (A to H) based on 1991 property values.
Try the Council Tax Calculator→Savings and Pensions(2)
ISA (Individual Savings Account)
A tax-free savings or investment wrapper; contributions up to £20,000 per year grow free of income tax and capital gains tax.
Try the ISA Calculator→SIPP (Self-Invested Personal Pension)
A flexible pension wrapper that lets you choose your own investments; contributions attract tax relief at your marginal rate.
Try the Pension Calculator→Income and Pay(2)
National Insurance (NI)
Compulsory UK government contributions paid by employees and employers that fund state pension, NHS, and welfare benefits.
Try the Take-Home Pay Calculator→PAYE (Pay As You Earn)
HMRC's system for collecting income tax and National Insurance directly from employee pay before it reaches the worker.
Try the Take-Home Pay Calculator→Need to calculate something? Visit the UK calculators hub for our full suite of free UK financial tools, or browse the US financial glossary for American financial terms.