Capital
Amount of money invested, not including interest earned that may have been added to it. In relation to a company can also mean its total net worth or equity.

Capital Gain
Increase in the value of a capital asset when it is sold or transferred, compared to its initial worth. Inflation can affect the 'real' capital gain. Capital loss is the opposite.

Capital and Interest Mortgage
(see Repayment Mortgage)

Capital Raising
Normally refers to a remortgage when additional funds are taken over and above the amount required to repay the existing mortgage debt which is then used for personal finance purposes.

Capped Rate
A capped rate is a mixture between a fixed rate and a variable rate. The interest rate is guaranteed not to rise above a set level within the capped rate period but if the normal variable mortgage rate is below the capped rate then the variable rate is charged. This gives the 'best of both worlds' as the interest rate can fall but will not rise above the capped rate. However, the level at which the cap is fixed is usually higher than for a fixed rate mortgage for a comparable period of time. The lender will normally impose early redemption penalties if the mortgage is redeemed within the first few years (see Redemption Penalties ).

CAR - Compounded Annual Rate
The annual rate of interest that will be earned if interest is credited to an account monthly, quarterly or bi-annually and allowed to remain on the account for that year. The rate will therefore be higher then the quoted standard rate and will enable comparisons with other accounts quoting annual rates.

Cash Back
This is the arrangement whereby a cash sum of money is repaid to the borrower at the start of the mortgage. The amount of the cash back will vary considerably from lender to lender with the highest amounts being paid where the borrower is willing to forgo any fixed or discounted rate offers and pay the normal variable mortgage rate. Cash back deals are also available in conjunction with some fixed or discounted rates but the amount of the cash back will normally be reduced in these circumstances. If a large cash back is being considered then it could, in some circumstances, be liable to Capital Gains Tax (refer to the lender, your accountant or local tax office for clarification ). The lender will normally impose early redemption penalties if the mortgage is redeemed within the first few years (see Redemption Penalties).

Cash Card
Plastic cards used for withdrawing cash from ATMs, or hole in the wall machines, with a personal identification number (PIN) to confirm validity of the user. These cards are commonly combined with credit or debit cards

Centralised Lender
This refers to the group of lenders, other than high street banks and building societies, who operate without a branch network, normally from one location.

Charge Card
Enables purchases and spending similar to a credit card but the debt has to be settled in full each month.

Clearing Bank
Member bank of a national cheque clearing system.

Collateral
Property or securities pledged to secure a loan, sometimes referred to as the 'security' for a loan.

Commission
Remuneration for work done as an agent or broker, paid by the product provider.

Conditional Insurance
This refers to insurance products which some lenders will impose as a condition of their mortgage offer. This could mean that the lender insists that accident, sickness and unemployment cover is taken out or that combined buildings and contents insurance is taken. If looking for a fixed or discounted product then these conditions should especially be watched for.

Consumer Price Index
Monthly index that measures the changes in a cost of a basket of consumer essentials and acts as a major indicator of a nation's inflation rate.

County Court Judgement (CCJ)
A judgement for debt recorded at a County Court. These judgements will be shown when the lender carries out a credit search. If the debt has been repaid, subsequent to the judgement being recorded, then the entry will be marked 'satisfied'. The appearance of CCJ's on the credit register will greatly reduce mortgage options and nearly all lenders will insist that they are satisfied before considering an application. Even with the judgement(s) satisfied few lenders are prepared to consider lending other than for the most minor judgements.

Credit Insurance
Insurance to cover the monthly payments on a loan should the borrower not be able to meet the commitment due to sickness or unemployment. Also known as payment protection.

Credit Rating
Overall credit worthiness of a borrower. For companies there are rating agencies that give ratings described in terms of 'AAA' or 'triple A'.

Credit Reference Agency
Collates information from a variety of sources on the borrowing habits of adults in the UK. This information, such as details of credit agreements, payment records, court judgements etc is supplied to lenders who use it in their credit scoring or underwriting systems. Details of personal records can be obtained by writing to the agency and enclosing a fee, normally of £2-£3.

Credit Scoring
A system used to calculate the risk of granting a loan or the probability that it will be repaid. Each lender sets their own criteria based on historical evidence of good and bad customer characteristics. Some lenders will use this as an indication of the potential borrowers credit worthiness whilst others may rely on it completely so that a loan application may be accepted or rejected depending on the score.

Current Account
Another name for an instant access account offering banking facilities such as cheque book, cash card, guarantee card and automated payments (standing orders, direct debits etc)