R85
Inland Revenue form that needs to be completed by non-taxpayers in order to receive payment of gross interest onto their accounts i.e. without basic rate income tax deducted.

Redemption Penalty
An additional charge made by the lender if the mortgage is repaid within a pre-agreed period of time. These have become increasingly common with the growth in fixed rate and heavily discounted products. They are generally imposed to stop borrowers hopping from one lender to another simply to take advantage of the latest heavy discount or cheap fixed rate. Normally expressed as a number of months interest within a set period of years i.e. 6 months interest if redeemed within the first seven years but may also be expressed as a percentage of the mortgage debt i.e. 5% of the mortgage if redeemed within the first seven years. Careful attention should be paid to these penalties as they vary considerably from lender to lender and the lower and shorter the penalty the more attractive the deal.

Real interest rate
The actual amount of increase in the purchasing power of your investment. It is equivalent to the quoted gross rate of interest less any personal income tax liability and less the effects of inflation on your capital.

Redemption penalty
A charge made for paying off a loan, or debt balance, before an agreed date.

Regional Lenders
This refers mainly to the smaller local Building Societies who restrict their lending to within certain regional locations. This could also be applied to a larger number of lenders who will not lend in Scotland or Northern Ireland and if you are looking for a mortgage in either of these areas you should check at an early stage that the lender will lend in these areas.

Remortgage
This is the process by which a mortgage on a property is moved from one lender to another. The new mortgage is used to repay the existing lender and at the same time additional funds may be raised for other purposes. Remortgaging has become an increasingly popular way to take advantage of the competitive deals offered by lenders to attract new business. If a remortgage is being considered then careful attention should be paid to the costs associated with arranging the remortgage as well as the savings to be made on the monthly repayment ( the costs can sometimes erode any savings to be made ). The remortgage calculator on this site highlights costs to take into account when considering a remortgage. A check should also be made with the existing lender to ensure that there are no early redemption charges.

Repayment Mortgage
Also called an Annuity mortgage or Capital and Interest mortgage. With this type of mortgage the monthly repayment includes an element of the capital sum borrowed in addition to the interest charged. In the early years of the mortgage the majority of the monthly repayment consists of interest with only a small part repaying the capital. However, as the debt gradually reduces the element of capital increases and the interest element reduces, so although the monthly repayment stays the same (assuming interest rate remain unaltered) the debt starts to reduce more quickly as the term of the mortgage progresses. On a 25 year term mortgage it would not be unusual to still owe over 50% of the original debt after the first 15 years. Providing the correct monthly repayments are made on their due dates this mortgage will guarantee to repay the total mortgage debt at the end of the mortgage term.

Residential Investment
See Buy to Let.

Retail Price Index
Measurement of the rate at which prices are rising i.e. inflation, calculated monthly by taking a sample of typical household goods and services.

Retention
This relates to monies withheld by lenders until certain mortgage conditions are met. This will normally relate to repairs or improvements to the property that the lender is insisting on.