Mortgage terminology and jargon explained: answers to common questions about mortgages

Buying a home is one of the biggest financial decisions you'll ever make. Whether you're a first-time buyer, switching your mortgage or moving home, you'll probably come across mortgage jargon that can feel confusing at first.

In this guide, we'll explain some of the most common mortgage terms used in Ireland, what they mean in plain English and why they matter. We'll also highlight how understanding your mortgage options can help you choose a product that suits your needs.

Understanding mortgage jargon

Mortgage jargon simply means the words and mortgage terminology commonly used by lenders, brokers, estate agents, and solicitors during the home-buying process.While some terms sound technical, most relate to a few key areas:

• How much you can borrow
• The cost of borrowing
• Your repayments each month
• The value of the property
• The mortgage application process

Once you understand the basics, mortgage conversations become much easier to follow.

Mortgage application questions to understand before you apply

Before applying for a mortgage, it helps to understand the common mortgage questions first time buyers may ask and the terms lenders use to assess your application. These usually relate to your income, deposit, documents, borrowing amount, property value, and repayment capacity.

What documents do I need to apply for a mortgage?

The documents needed for a mortgage application can vary depending on your circumstances, such as whether you're buying a property, moving your mortgage from another lender, or whether you're employed or self-employed. In most cases, you'll be asked to provide:

1. Proof of identity – A valid photo ID, such as a passport or Irish driving licence.
2. Proof of address – A recent utility bill, bank statement, or other accepted document showing your current address.
3. Evidence of income and employment – The specific documents required will depend on whether you're employed, self-employed, or have other sources of income.

Additional documentation may be requested depending on your individual application and mortgage type. For more information see our mortgage application checklist.

What is a mortgage affordability assessment?

A mortgage affordability assessment is a check carried out by the lender to see whether a mortgage is affordable for you, based on your income, spending, savings, and existing financial commitments. The lender will look at your overall financial situation, including your income, regular expenses, debts, and account activity. They may also assess how well you could manage your repayments if interest rates were to increase in the future.

The aim is to make sure the mortgage is a realistic and sustainable option for your circumstances.

What is Approval in Principle (AIP)

Approval in Principle, is an indication from a lender of how much they may be willing to lend based on the information you've provided.

It is not a formal mortgage offer, but it can help you:

• Understand your budget
• Start viewing properties with confidence
• Show sellers and estate agents that you're a serious buyer

Many buyers secure Approval in Principle before beginning their property search. For more information on AIP, check out our guide to Approval in Principle.

If you're preparing for this stage, our guide to mortgage application documents explains what information lenders typically request.

What is Loan-to-Value (LTV)

Loan-to-Value, or LTV, is the percentage of the property's value that you borrow from a lender. For example:

• Property value: €300,000
• Mortgage amount: €270,000
• Deposit: €30,000

In this example, the LTV is 90%.

LTV is important because it can influence the mortgage products available to you and the interest rate you may receive.

What is a house deposit?

Your deposit is the amount of money you contribute towards buying the property. The size of the deposit required depends on your circumstances and current lending rules. Many buyers spend years saving for a deposit, making it one of the most important milestones in the home-buying journey.

If you're just getting started, our guide on how to buy a house in Ireland covers the process step by step.

What is mortgage drawdown?

Drawdown is the point at which the mortgage funds are released by the lender. For buyers, this is one of the final steps before receiving the keys to their new home.

Once drawdown takes place, your mortgage repayments begin according to the agreed schedule. Read more in our blog on how to buy a house in Ireland.

Mortgage cost questions

Mortgage costs can include more than your monthly repayment. Before choosing a mortgage, it helps to understand how interest rates, APRC, fees, insurance and other home-buying costs can affect the total amount you may pay.

What does mortgage interest rate mean?

An interest rate on a mortgage is the cost of borrowing money from a lender. The rate you receive determines how much interest you'll pay on your mortgage and directly affects your monthly repayments.

Even small differences in interest rates can have a noticeable impact over the lifetime of a mortgage, which is why it's important to understand your options.

What does APRC in a mortgage mean?

APRC stands for Annual Percentage Rate of Charge. This figure is designed to show the overall cost of borrowing by combining the interest rate and certain mortgage-related charges into a single percentage.

When comparing mortgage products, APRC can provide a more complete picture than interest rates alone.

What is mortgage protection insurance, and do you need it?

Mortgage Protection Insurance is a type of life insurance designed to repay the outstanding mortgage balance if the policyholder passes away during the mortgage term.

In most cases, lenders require it before a mortgage can be drawn down.

Are there legal fees and other home buying costs

The mortgage itself isn't the only cost involved in buying a home. Additional expenses may include:

• Solicitor fees
• Valuation fees
• Survey costs
• Stamp duty
• Insurance

Understanding these costs early can help you budget more accurately. Our blog on the hidden costs of buying a house explores these expenses in more detail.

Property value and ownership questions

Some mortgage terms relate to the value of the property and how much of it you own. These questions can be useful when applying for a mortgage, switching mortgage provider or comparing future borrowing choices.

Valuation

A valuation is an independent assessment of a property's market value. Lenders require a valuation to confirm that the property is worth the amount being borrowed against it.

The valuation helps protect both the borrower and the lender by ensuring the purchase price aligns with market conditions.

Equity

Equity is the portion of your home that you own outright. It is calculated by subtracting the remaining mortgage balance from the property's current value. For example:

• Property value: €350,000
• Mortgage balance: €250,000
• Your equity would be €100,000.

Equity often becomes particularly important for mortgage switchers and homeowners considering future borrowing options.

Mortgage repayment questions

Your mortgage repayment is the amount you pay back to your lender each month. The amount can depend on your mortgage term, interest rate, repayment type and whether your rate is fixed or variable. Understanding these questions can help you choose a mortgage that fits your budget now and over the long term.

What is a mortgage term?

The mortgage term is the length of time over which you'll repay your mortgage.

Common mortgage terms range from 20 to 35 years. Generally:

• Longer terms can reduce repayments each month
•  
• Shorter terms can reduce the total amount of interest paid over the life of the mortgage

Choosing the right mortgage term often involves balancing how much you can afford today with overall borrowing costs.

What is a Fixed Mortgage Rate

A fixed rate mortgage keeps the same interest rate for an agreed period. The main advantage is certainty. Your repayments remain predictable while the fixed rate applies, making budgeting easier. Fixed rate products are popular with buyers who value stability and want to know exactly what their repayments will be.

You can learn more by reading our blog; fixed rate mortgages explained.

What is a Variable Rate Mortgage

A variable rate mortgage has an interest rate that can change over time. If the rate changes, your monthly repayments may change too.

Some borrowers choose variable rates because they may offer greater flexibility. However, repayment amounts are less predictable than with a fixed rate mortgage. See our article on choosing between a fixed or variable rate mortgage.

A common Avant Money Mortgage question

What makes One Mortgage different?

Most fixed rate mortgages in Ireland are fixed for a limited period before moving to another rate which could change by the time your fixed rate expires.

Avant Money's One Mortgage is designed differently. It is the only mortgage in Ireland that offers a fixed interest rate for the entire mortgage term*, meaning the interest rate remains the same throughout the life of the mortgage.

For buyers seeking long-term certainty, understanding this distinction can be an important part of comparing mortgage options.

*One Mortgage unique/only claim and claim of competitive follow-on variable rates based on comparison against competitor mortgage products as advertised on their websites on 1st August 2026. One Mortgage is designed to give a fixed rate for the full mortgage term (between 5 and 30 years), whereas competitor Fixed Rate Mortgage products are designed to provide a fixed rate for a set number of years (between 1 and 10), following which they revert to a managed variable rate or a new fixed rate.

Lending criteria and terms and conditions apply. The monthly repayment on a 20-year mortgage with Loan to Value (LTV) greater than 80% with variable borrowing rate of 3.95% on a mortgage of €100,000 is €603.35 for 240 months. Total amount repayable is €145,028.74. If interest rates increase by 1% an additional €53.85 would be payable per month. For this example, Annual Percentage Rate of Charge (APRC) of 4.0% applies and consists of variable borrowing rate of 3.95%, valuation fee of €185, and security release fee of €40.

LTV is the amount borrowed as percentage of the value of your home. Information correct on 1st August 2026 and subject to change. You mortgage your home to secure the loan. Maximum loan is generally 3.5 times gross annual income (4.0 for first time buyers) and 90% of the property value (80% for switchers). Applications from residents of ROI over the age of 18 only, and subject to repayment capacity, financial status, and property valuation. We require property and life insurance.

Bankinter S.A. trading as Avant Money, is authorised by the Banco de Espana in Spain and is regulated by the Central Bank of Ireland for consumer protection rules.