Mortgage glossary - C

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Mortgage terms defined on this page:

Cap

A mortgage with a cap has a maximum interest rate for a given period; this is called a capped rate mortgage. The interest rate you pay will not go higher than the agreed capped rate during the period, but may rise or fall underneath the capped rate.
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Cap and collar

Similar to a capped rate mortgage, however as well as an upper limit on the interest rate (a cap) there is also a lower limit (a collar). This means slightly less risk for the lender which will be reflected in a cheaper deal than a standard capped rate mortgage. However the borrower will lose out if the rate falls below the collar.
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Capital and interest mortgage

See repayment mortgage.
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Capital raising

This normally refers to a re-mortgage when additional funds are borrowed, as well as the amount needed to cover the mortgage. This can be used as a form of secured loan.
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Cashback mortgage

With this type of mortgage, a cash lump sum is paid to the borrower at the start of the mortgage term. The amount will vary from lender to lender. If the amount is large, it could be subject to Capital Gains Tax – ask your lender for details. As a general rule, the greater the cashback amount, the more restrictive your mortgage is likely to be – you might be offered a higher interest rate or have more fees to pay, for instance.
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Charge

In property law, this is your mortgage lender’s right to receive cash payment to cover the debt if the property is sold.
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Charge certificate

If the property is registered with the HM Land Registry, this certificate will prove or transfer ownership of land. The Land Registry issues a Charge Certificate to the mortgagee of the property or the registered proprietor.
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Chattels

This is a legal term that means ‘the things you own’. The legal definition is property of any kind other than freehold land. In practice, it also covers your personal possessions.
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Chief rent

Similar to the ground rent paid by a leaseholder, this is a small sum of money paid by the owner of a freehold property to the Lord of the Manor.
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Collateral security

This is extra security provided by a borrower to back up his/her intention to repay a loan. It is normally in the form of the property’s deeds, so that the lender can resell the property if the borrower does not make his or her repayments.
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Conditional insurance

This refers to insurance that must be taken out as a condition of a mortgage offer. The lender can insist that the borrower take out cover for accident, sickness and unemployment or that combined buildings and contents insurance.
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Contract race

This occasionally happens in England and Wales. It describes the situation where a seller has accepted two or more offers on the property and will sell to whomever is ready to exchange contracts first. This is less common now than it was in the mid-1980s.
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Conveyancing

This means the legal transfer of ownership of freehold or leasehold properties. This can take any amount of time from one day to several months. A period of about 12 weeks between making an offer and moving in is the most common.
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Covenant

This is the agreement that binds one or both parties who promise to perform or not to perform certain actions. Housing covenants may restrict what you can do with your property, or may require you to do certain things (see Conditional Insurance for example).
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THINK CAREFULLY BEFORE SECURING ANY DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

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