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Glossary

Tight definitions of the terms that matter — each one connected to where it's actually used.

The mortgage as a percentage of the property’s value — the number that sets your deposit and often your rate.

The yearly cost of borrowing including standard charges, used to compare loans and credit cards.

The all-in yearly cost of a mortgage including fees, designed so offers can be compared like-for-like.

The basket-of-goods index used to measure inflation — what goes in it and what a CPI figure actually claims.

One hundredth of a percentage point — the unit finance uses when percentage-point moves are too coarse.

Gross is the amount with everything included; net is what remains after deductions — which is which depends on context.

What a savings rate really pays over a year once compounding frequency is taken into account.

The unit for the gap between two percentages — the difference between 4% and 6% is two percentage points, not 2%.

What money can actually buy — the quantity inflation erodes even while the number in the account grows.

The slice of your home you actually own: its value minus what is still owed on the mortgage.

The world’s reference clock — the time standard every time zone is defined as an offset from.

Goods taxed at a VAT rate of nothing — which is not the same as being exempt, and the difference matters to businesses.

Prices falling across the economy — rarer than inflation, and more feared by the people who set interest rates.

The civil calendar most of the world runs on, introduced in 1582 to stop the seasons drifting through the year.

Paying a loan down with instalments that cover interest first and principal with the rest, on a fixed schedule.

The international standard for writing dates and times — year first, so dates sort correctly as text.

An investment’s return after inflation — the growth in what your money can actually buy.

How often earned interest is added to the balance — yearly, monthly or daily — so it can start earning interest itself.

What an amount of money will be worth at a set date in the future, given a rate of growth.

The original amount of money saved, invested or borrowed, before any interest is added.