Glossary of Terms
| Additional Repayments | Any payments that you make over & above the minimum payment required. Making these additional repayments reduces the term of your loan.
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| Amortisation | The gradual reduction over time of the amount borrowed plus interest through regular payments.
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| Break Costs | A fee charged to you when you change from a fixed rate back to variable before the end of the specified fixed rate period. Break costs are also applicable when you pay out the loan or choose to discharge within the fixed rate period.
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| Certificate of title | A certificate detailing who owns the land and any restrictions on it.
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| Collateral Security | Additional asset or security supplied by a borrower to obtain a home loan
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Comparison Interest Rate
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The annual percentage rate of a home loan incorporating all other fees you need to pay. |
| Conveyencing | Legally transferring a property from one person to another
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| Deferred Establishment Fee | A fee that you incur when you decide to discharge the loan before the Early Repayment Penalty period ends.
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Exchange of contract |
The point at which the buyer and the seller swap documents. This starts the purchase/sale process.
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Execution of contract
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When you sign your contract
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| Fixed Rate | An interest rate which is locked in for a defined period of time and will not change during that time.
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LMI (Lenders Mortgage Insurance)
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Insurance that protects the lender should the home loan not be repaid in full.
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LVR (Loan To Value Ratio)
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The loan amount as a percentage of how much your house is worth.
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| Minimum Repayment | The amount you are contractually required to pay each month (or fortnight) in order to pay off your home loan in the agreed time.
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| Mortgage | A home loan that’s secured against real estate
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| Mortgage Broker | A broker acts as an intermediary who sources mortgage loans from a panel of lenders on behalf of individuals or business.
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| Mortgage Manager | A home loan specialist who arranges the funds for your loan and provides ongoing, prudent management through every phase of your mortgage.
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| Mortgage Originator | A person or an organization that sets up a loan from another source (i.e. Non Bank Lender).
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| Mortgagee | The lender of the funds
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| Mortgagor | The person who borrows the funds
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| Principal | The original amount you borrow, not including interest
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Principal and interest Loan |
A loan where the repayments cover both the original amount borrowed (principal) and the interest that will be charged over the term
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| Re-amortize | To work out the minimum payments needed to pay back the outstanding balance of your home loan over a remaining period of time (if the amount borrowed has changed)
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| Redraw Facility | A flexible home loan feature allowing you to borrow back any money that you have already paid on your home loan.
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| Settlement | The date on which you receive the money from the lender
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| Term | The amount of time that your home loan must be repaid within.
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