Mortgage Requirements Ireland: A Handy Mortgage Jargon Buster

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When you’re thinking of getting a mortgage, the last thing you want is to be confused by a lot of jargon. There are a few terms you may not be familiar with that you’ll need to know, but our handy mortgage jargon buster has got you covered.

Annual Percentage Rate (APR)

The total cost of your borrowing over the course of a year including the interest rate and other fees, this is averaged out over the full term of your mortgage.

Approval in Principle

This is when AIB gives you approval in principle for your mortgage loan, subject to certain conditions.

Buy-to-Let Mortgage

A mortgage for a property that you wish to let to tenants as a source of income rather than living in it. This kind of mortgage can have different conditions than a standard owner occupier mortgage.


The security for a loan is described as collateral. With a mortgage, the property you take the mortgage out on is the collateral.

Credit Rating

A rating that lenders give individual borrowers based on their likelihood of paying back a loan. It will contain details of all your current loans and any you’ve had within the last year. The credit rating is one consideration used to evaluate your suitability for a mortgage.

Deferred Start

A deferred start is where you have the option to delay your mortgage repayments for the first 6 months of your mortgage. At the end of the deferred start, your mortgage repayment amounts will be increased to ensure that your mortgage will be repaid (together with interest due) within its original term



The amount of money you must pay up front to secure your mortgage – a minimum of 10% of the purchase value of the property is required for first time buyers.


The difference between the amount owed on the mortgage and the value of the property. If you are in negative equity, it means the value of the house has fallen below the outstanding mortgage debt.The difference between the amount owed on the mortgage and the value of the property. If you are in negative equity, it means the value of the house has fallen below the outstanding mortgage debt.

Fixed Rate Mortgage

A mortgage loan that is charged at a fixed rate for a pre-agreed length of time. The rate payable will not change over the agreed mortgage term..


Letter of Loan Offer

Once your mortgage application is approved, you will be sent a Letter of Loan Offer in which we set out the official loan conditions.

Loan to Value (LTV)

The LTV essentially represents the difference between the value of the property and the amount of your Mortgage [PC1]of your mortgage e.g. a mortgage of €207,000 on a property valued at €230,000 would be 90% LTV.

Payment Holiday

This is an agreement which allows you to postpone mortgage payments for a period of time e.g. six months. This option can be useful for certain family/lifestyle events such as maternity leave, education fees or home property improvements. However, your repayments will be higher when payment resumes to cover the cost of the postponement.

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Split Rate Mortgage

This type of mortgage allows you to have both a variable and fixed rate of interest on separate proportions of the loan. The advantage of this is that when interest rates increase, only the proportion subject to the variable rate will be affected.

Variable Rate

A type of mortgage interest rate that falls or rises in line with interest rate changes.

Top Up

This is when the lender gives you additional funds based on the same mortgage security (based on repayment capacity and normal lending terms and conditions).

Have a Question About Your Mortgage Application?

If you come across a term we haven’t covered here, or you need any other information about mortgages from AIB, our customer service team will be happy to help.

Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland. Copyright Allied Irish Banks, p.l.c. 1995.