Mortgage Dictionary: P

Part Endowment

A mortgage that is arranged partly on an endowment basis, the balance of the loan most commonly being arranged on a capital and interest basis.

Partnership

More generally, a relationship of two or more entities conducting business for mutual benefit.

Pay Rate

See: initial rate.

Payment Cap

A legal limit on the amount a monthly payment can go up by on a variable rate loan / mortgage.

Payment Default

If you default on your credit repayments, the lender is entitled to reposes your house to recover the debt.

Payment Method

A means by which the mortgage capital is eventually repaid.

Payment Protection

See accident, sickness and unemployment insurance.

Payment Protection Insurance

See ASU accident, sickness and unemployment insurance. And unemployment insurance.

Payment Schedule

A schedule of monthly payments under a loan.

Payment Shock

If you have taken out a mortgage on a low rate, the low rate end and the payment jump up the standard variable rate.

Pension Mortgage

An interest-only mortgage where the capital will be repaid from the tax free cash sum that can be received from the pension fund at maturity.

Period

The length of time for which, or end date until, the initial interest rate applies.

Personal Pension

Established under the social security act 1986, personal pensions allow individuals to make their own provision for an income in retirement. Tax relief is allowable on the contributions at the investor's highest marginal tax rate. Investments grow free of all taxes to create a fund to be used at retirement to purchase an annuity. Up to 25% of the fund may be taken as tax free cash and the balance must be used to purchase an annuity.

Portable

Describes a mortgage that can be transferred from one property to another. This most commonly applies to loans in the category of treasury product.

Postcode

The first one or two letters of the first part of the postcode. e.g. B for Birmingham.

Previous Lender's Reference

A reference from a lender who has previously lent money to a prospective borrower regarding the conduct of the loan account.

Prime Rate

The best interest rate possible to the lender's most valuable customers.

Principal

The amount of credit still outstanding - the amount on which interest is calculated.

Product

A mortgage product offered by a lender.

Professional

A person who is a member of a recognised profession, such as a doctor or solicitor. The definition of a professional can vary substantially from lender to lender with occupations such as banker being accepted as a profession by some but rejected by others. Many professions are disquvalified from practicing if they become bankrupt.

Property Construction

A method of construction.

Purchase

The acquisition of a property.

Purpose Built Flat

A flat designed and built as a self contained residential unit within a larger structure all sharing a common entrance.