The terminology that will help you understand and make the home loan and buying process easy. We’ve put together the commonly used jargon so you don’t get confused throughout your home loan process.
A short term home loan to pay for the purchase of your new property, before you sell your existing property.
A co-borrower is the other person you take your home loan out with (i.e. your joint account holder). This person’s name appears on loan documents and their income and financial history will also be used to apply for the loan.
This is the rate that helps you see the true cost of taking the home loan, making it easier to compare rates across different lenders. It’s calculated using a standard formula to include the interest rate, as well as certain fees and charges related to the home loan.
An indication from us that shows how much we are likely to let you borrow based on a review of your financial situation and needs, and it’s subject to certain terms and conditions.
A loan specifically for building or renovating where you can draw down the loan progressively and only pay interest on the amount you’ve used.
The process of transferring a property from one owner to the next. You’ll need a lawyer, solicitor or licensed conveyancer to do this for you.
The cooling-off period is the very last stage that you, as a property buyer, can withdraw from a sale without major legal or financial consequences. The cooling off period varies depending on the state you live in and how you buy your property.
An interest rate that stays the same for a set period of time e.g. 2 years. If you have a home loan with a fixed interest rate, you’ll know exactly how much your repayments will be for this term.
A person, company or trust that helps you secure a loan by offering their own property (or properties) as additional security for your loan. If a company or trust is the borrower and is unable to service the loan, a guarantor can also help by contributing additional income. Guarantors cannot contribute additional income where the borrower is an individual.
Through a top up you can borrow amounts over $10,000 that are in addition to the original loan amount – subject to equity held in your property and our approval.
The minimum payments only cover interest charges on the loan. Interest Only payments are for an agreed period of time.
Loan provided for the purposes of purchasing, renovating, building an investment residential property or for acceptable personal investment.
LMI is an insurance premium which we collect (from you) and pass on to our Insurance provider Genworth Australia. LDP is a bank fee which you pay directly to us.
The circumstances of your loan will determine whether a loan incurs LMI or LDP. You will only be required to pay for one, not both.
All premiums are capitalised (added) to the total home loan amount when your home loan is settled. This means you’ll pay more interest over the life of the loan.
The total you’ve borrowed for your loan as a percentage
of your property value.
For example: if your property is valued at $400,000 and you’ve borrowed $320,000, your LVR is 80% ($320,000 divided by $400,000).
$320,000 ÷ $400,000
LVR=80%
