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2S Financial Glossary

What is it? Outperform / Speculative

Finance Term Definition Added By: Sarah

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Other Similar Finance Terms:

Financial Term Lease is A contract by which the owner of property (which can be a building, a car, an item of machinery, etc) allows another person to use it, in return for rent being paid

Financial Term Utmost Good Faith is The principle of insurance that requires you to give all relevant information to the insurance company.

Financial Term Repayment Mortgage is 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.

Financial Term Factoring is The purchase of a business accounts receivable at a discount.

Financial Term Rights issue is New shares issued and sold by a company to raise fresh capital.