Glossary
Account Number
A unique number allocated to a bank account (see also IBAN).
Acceptance Fee
The fee charged by some mortgage lenders to process a mortgage.
Advance
Amount of the mortgage loan to be issued by the lender.
Annual Equivalent Rate (AER)
This is the rate of interest earned within a year, no matter how often interest is added to your account. The higher the AER, the higher the return you receive.
Annual Percentage Rate (APR)
A lender is always required to quote the Annual Percentage Rate (APR) when advertising a loan or the borrowing rate and its purpose is to help you compare the true cost of borrowing. The Annual Percentage Rate (APR) calculates the total amount of interest that will be paid over the entire period of the loan.
Annuity (or Repayment) Mortgage
Also referred to as a capital and interest mortgage (the most common type of mortgage), where the monthly repayment consists of an amount to repay the capital (original loan amount) plus an amount towards the interest that is charged to the mortgage account.
Balance
This is the amount of money as shown on your bank statement in your bank account at any given time.
Bank Fees & Charges
Account Fees may be incurred for the processing of transactions on your account including lodgements and withdrawals and also the maintenance of your account. Service charges relate to charges for additional services associated with your account such as Bank Drafts, duplicate statements etc.
Bank Identifier Code (BIC)
Also known as the SWIFT address, this is a unique number that identifies your bank. It is the code necessary (together with your IBAN) to send and receive automated international payments.
Bear
An investor who believes a stock price or the overall market level will decline.
Breakage Costs
If you break the terms of a fixed interest rate loan agreement, this may incur a cost to the Bank which you may have to pay. For further details click here.
Broker
A financial advisor offering advice on the range of mortgage, deposit and investment products etc. available from various lenders.
Bull
An investor who believes a stock price or the overall market level will rise.
Business Day
This means a day (other than a Saturday, Sunday or public holiday) on which the Bank is generally open for business in Ireland.
Buy-to-Let / Investment Mortgage
A mortgage loan for a property that will be let by the borrower to tenants as a source of income and investment - the buyer will not live in the actual property. This mortgage loan may have different conditions than those applicable to owner occupier loans
Capital
This is the money saved, invested or borrowed by someone before interest or loss.
Cheque
A written order to make a payment of a sum of money from a current account to someone else. Supplies of cheques are available in book format on certain current accounts.
Collateral
The security for a loan is sometimes described as collateral. In the case of a mortgage loan, the property being purchased is considered the primary collateral for the loan and the borrower will be liable for any shortfall if the property is sold for an amount less than the outstanding loan, including any accrued interest, charges, legal, selling and other related costs if this is the case.
Consumer Price Index
This index measures the average cost of goods/services purchased by consumers.
Cost of Credit
Cost of Credit is the difference between the amount you borrow and the total you will repay including the interest by the end of the loan period.
Credit Interest
Money paid by the Bank to you in return for the deposit of funds, expressed as an annual percentage of the amount of the funds.
Credit Rating
The rating that lenders put on borrowers and banks based on their credit worthiness.
Credit Search
This is where the Bank obtains credit references from a credit reference agency or agencies to enquire on your credit history. This may influence your ability to obtain credit.
Current Account
A bank account used to hold money that is needed on a regular day-to-day basis. It is used to manage money in the short-term and allows you to receive money such as salary or other types of income, withdraw cash by using a Debit Card or at a bank counter; pay for items using a Debit Card or by writing cheques; make payments by standing order or direct debit; transfer money to other accounts; carry out transactions using Phone and Online Banking.
Debit Card
A debit card is a card linked to your bank account that allows you to pay for items at POS (Point of Sale) terminals in shops, restaurants etc. or to withdraw cash at ATMs. You can also pay for items or pay bills by telephone or on the internet by quoting your debit card details.
Debit Interest
This is the amount you pay to borrow money and is added to the loan or overdraft. The rate is the amount charged.
Deposit
A sum of money paid to the seller on exchange of the contract for the purchase of property. This is subject to forfeit if the purchaser does not complete the transaction. A deposit can also be the sum of money invested in one of the bank's savings products.
Deposit Account
This is a type of savings account on which interest is paid. There are no cards or cheque books available with this type of account.
Depreciation
Any decrease in the value of a property.
Deposit Interest Retention Tax (DIRT)
This is a tax on any credit interest paid to customers (currently 33%, but subject to change) and forwarded by the Bank to the Revenue Commissioners. There are certain exceptions where customers may be exempt from paying DIRT. Check out www.revenue.ie for more information.
Deposit Rate
See Credit Interest.
Direct Debit
This is a service for making payments from the Payer’s account which are initiated by the Payee on the basis of the Payer’s consent.
Discounted Rate
An initial discount off the original interest rate, typically for a period of one or two years.
ECB (European Central Bank)
The European Central Bank is the central bank for Europe's single currency, the euro.
Equity
The difference between what a home is valued at and the outstanding mortgage debt.
Equity Fund
This is a grouped fund which invests in equity related assets according to an agreed investment policy.
First Legal Charge
A mortgage lender takes a First Legal Charge on the property being purchased which means that if a borrower defaults on mortgage repayments and the property is sold to repay debts etc., the mortgage lender will be the first party to receive any proceeds of the sale.
Fixed Interest Rate
A fixed interest rate is set on the day an account is opened, and is fixed for the term of the product or in the case of a loan can be fixed for a specific period within the term of the loan.
Fixed Term
Funds are deposited for a specific length of time. If you need to withdraw funds during the agreed term, it is known as breaking a fixed term and a charge may apply.
Fixed Term Deposit
A deposit which earns interest at a rate which is calculated based on the length of time/term it is invested for. Fixed term funds normally do not allow for early withdrawal. A penalty may be incurred if early withdrawals are allowed.
Fund Management
This is where professional fund managers manage investments on behalf of investors. An annual fund management charge is payable for this service.
Gross Interest
The total interest earned on savings before Deposit Interest Retention Tax (DIRT) is deducted.
Guarantor
A guarantor is a person other than the borrower who guarantees loan repayments.
Home Insurance
Some of the risks your home may be subject to include damage by fire or flooding, burglary or someone injuring themselves on your property. Taking out insurance can cover you for some of these risks.
IBAN (International Bank Account Number)
This is a unique number for your account which along with your Bank Identifier Code (BIC) is required for international transactions, particularly but not exclusively in Europe.
Index
A statistical indicator that measures price movement in financial markets or the economy.
Indexation
This is where adjustments are made from time to time to contractual payments based on changes in an index e.g. consumer price index.
Inflation
The risk that the value of your money may reduce over time. When prices increase, the amount you can purchase with your money decreases unless you earn more than the rate of inflation.
Interest
See Credit Interest and Debit Interest.
International Payment
A payment to and/or from an account outside the Republic of Ireland in any currency or a payment to and/or from an account in the Republic of Ireland in a currency other than in euro.
Investment
The investment of money, e.g. in a financial institution or by purchasing stocks or shares in a company, with the purpose of making a profit.
Investment Portfolio
It is a collection of assets owned by an individual, group or company.
Irish Stock Exchange
The Irish Stock Exchange is an entity which provides "trading" facilities for stockbrokers and traders, to trade shares and other securities listed on the Irish Stock Exchange.
Joint Account
An account opened in more than one name. This can apply to personal customers e.g. husband and wife, and business customers e.g. partnerships.
Letter of Offer
Once a mortgage application is approved, a formal Letter of Offer is sent to the borrower setting out the conditions of the loan. The borrower’s solicitor will also receive a copy with a request to proceed with the legal formalities.
Lodgement (Credits)
An amount of money paid into your bank account.
Loan to Value (LTV)
Loan to values are shown as percentages and represent the relationship between the size of the mortgage loan and the value of the property. For example a mortgage of EUR 90,000 on a property valued at EUR 100,000 would be shown as 80% Loan to value.
Mortgage Loan
A long-term loan, usually 20 to 35 years, secured by a mortgage against the borrower’s property (refer to First Legal Charge).
Mortgage Term
The length of time permitted by the Bank to make the full repayment of the mortgage loan.
Mortgagee
The lender providing the mortgage loan.
Mortgagor
The person who takes out the mortgage loan i.e. the borrower.
Mutual Fund
Similar to above, this is where investors' money is used to purchase units/shares in an investment fund and the monies are invested in a variety of investments such as properties, stocks, shares etc.
Negative Equity
When the value of the property has fallen below the outstanding mortgage debt
Net interest
The actual amount of interest you will receive once Deposit Interest Retention Tax (DIRT) owed to Revenue has been paid. See Gross Interest and Deposit Interest Retention Tax (DIRT).
National Sorting Code (NSC)
This is a unique number to identify your bank and branch for domestic payments.
Online Banking
This refers to carrying out certain banking transactions over the internet. All the major banks offer this service to their customers. It generally offers customers easier access to their bank accounts and the option to transfer money, pay bills and top up their mobile phone.
Overdraft
An agreement with your bank to spend more money than you actually have in your account. An agreed overdraft is the limit up to which you may borrow from the bank, when there are no funds in your current account. Your bank must normally approve an overdraft in advance. If you do not have overdraft permission the bank may still allow your account to go into overdraft but may charge an unauthorised overdraft fee.
Payee
Payee means the receiver of a payment.
Passive Portfolio (Indexed)
Where investment managers take a ‘passive’ approach to managing the fund i.e. they use portfolios that are structured to provide returns to track a market index e.g. the ISEQ.
Payer
Payer means the maker of a payment.
Payment Protection Insurance
Payment Protection insurance is designed to cover your repayments on a loan / mortgage / credit card if you suffer from an accident, illness, death or redundancy.
Personal Identification Number (PIN)
A Personal Identification Number (PIN) is the secret four digit number that is used with a credit card as issued by the Bank and/or subsequently chosen by the Cardholder.
Personal Loan
A loan that is granted for personal use. It is usually unsecured and based on your ability to repay.
Pooled Investment
This is where a number of investors invest different amounts of money in a fund which is used to purchase a variety of assets including stocks, shares and properties. With pooled investment, the risk for investors is spread over a different fund and administration and fund management costs may also be significantly reduced.
Principal
The sum of money borrowed from the lender – generally what is owed, not including the interest. This is also known as capital.
Redemption
When a mortgage loan is paid in full - including interest to date and all charges. This usually occurs when moving to another property or when the end of the mortgage term is reached. For example, if the mortgage is at a fixed interest rate, and is paid off in total before the end of the mortgage term. (refer to Breakage Costs).
Referral Item Charges
These charges apply when cheques, withdrawals, direct debits and standing orders are presented for payment on your account and, when paid, place the account in an unauthorised overdraft position.
Repayment Break
Repayment Breaks allow the borrower to spread monthly repayments over a shorter number of months, for example, 10 months instead of 12, or postpone repayments for a time, for example 3 months.
Remortgage
A process whereby the mortgage loan due to one mortgage lender is repaid by a new mortgage loan issued by a new mortgage lender, usually also requiring a new mortgage over the property.
Return
The amount of money, in the form of interest that a customer receives when they save money.
RIP
Residential Investment Property - A property that is not occupied by the owner, usually purchased specifically to generate profit through rental income and/or capital gains.
Risk
The possibility that the investment will not yield any/as much return as expected or hoped for.
Security
Also referred to as collateral, security is an asset(s) belonging to you which you have assigned to the Bank. The Bank has the right to sell or apply the asset(s) towards payment of the debt in the event that you default on the borrowing. The normal practice is that the borrower will have to repay any shortfall if the sale of the asset does not repay the loan in full (including costs and fees).
Same Day Value
Using the same day value electronic payment service, you can make a payment in euro to another bank account in participating banks in the Republic of Ireland to arrive on the same day.
Savings Account
An account where you can save and earn interest.
Single Euro Payments Area (SEPA)
SEPA will create a single, transparent payment market for domestic and international euro transactions. Individuals can make an electronic payment to any recipient located in the SEPA zone from their bank account using the BIC and IBAN standard to identify the recipient's account.
Split Rate Mortgage
A proportion of the mortgage loan is set at a fixed interest rate, and the remainder at a variable interest rate. In the event of an interest rate change, only repayments on the variable portion of the mortgage loan will be affected.
Standard Variable Rate
A standard variable rate is a variable rate set by the lender and may change at any time at the lenders discretion.
Standing Order
This is an instruction from you to the Bank to pay a specified amount from your Account at regular intervals to the account of a specified payee.
Statement
A bank statement is a record showing lodgements (credits) and withdrawals (debits) on your bank account. They can be paper-based or electronic, depending on your preference.
Tax Relief at Source (TRS)
Tax relief is available for home mortgage interest in certain circumstances. The tax relief is granted at source and is administered by the lender. The lender either reduces the mortgage repayment by the amount of the tax relief, or a credit is lodged into the account from which the repayments are made. This applies in respect of a main residence only.
Term of Loan
The agreed period of time for the customer to make full repayment of the loan.
Title Deeds
Legal documents that provide evidence of a persons ownership of a property.
Top-Up Loan
An additional amount of money lent to an existing borrower, increasing the amount owed of the existing loan
Top up Mortgage Loan
An additional mortgage loan given by the lender to an existing borrower on the same mortgage security. The mortgage loan ‘tops up’ an existing mortgage to a higher level.
Tracker Rate Mortgage
This is a mortgage that is set at a fixed percentage or 'margin' above the European Central Bank (ECB) rate.
Uncleared Effects
When cheques, drafts or other non-cash items drawn on other financial institutions are lodged to your account, they are shown in the balance of your account although the Bank has not received value for them. Until the Bank receives value, these items are known as “uncleared effects”. You may not be able to withdraw these funds until they are “cleared”. If you do you may be liable to pay Uncleared Interest on any amount withdrawn.
Uncleared Interest
If you withdraw funds from your account for which the Bank has not received value (i.e. a cheque has not cleared), then you may be subject to uncleared interest being charged on the amount withdrawn.
Valuation Survey
A survey that can be requested by lenders so as to provide an independent professional valuation of the property.
Variable Interest Rate
A variable rate is an interest rate that is subject to change at any time.
Variable Rate
This is an interest rate that may rise and/or fall over the period of the borrowing.
