Understand every home loan term like a pro

Advertised Rate
The interest rate promoted by a lender for a specific home loan. It does not include fees or charges, and can differ significantly from the comparison rate.

Comparison Rate
A rate that includes the interest rate plus most fees and charges, giving a more accurate reflection of the loan’s true cost.

More about advertise rate VS comparison rate

Fixed Interest Rate
A home loan rate that stays the same for a set period, giving you predictable repayments.

Variable Interest Rate
A rate that can go up or down based on market conditions — your repayments may change over time.

More about Fixed interest rate vs Variable interest rate

Split Loan / Split Rate Loan
A home loan that is split into fixed and variable portions, offering a blend of rate stability and repayment flexibility.

Redraw Facility
A loan feature that allows you to withdraw any extra repayments you’ve made if needed, offering flexibility in managing funds.

Refinancing
Switching to a new home loan, either with a different lender or better terms, to save money or access equity.

Repayments
Regular payments you make on your home loan — can be weekly, fortnightly or monthly.

Equity
The value of your home that you truly own. It's calculated as your property's current value minus what you still owe on your loan.

Extra Repayments
Payments made on top of your required loan repayments, which can reduce your loan term and interest paid over time.

Revolving Credit (Line of Credit)
A flexible loan where you can borrow up to a limit, repay, and borrow again — like a credit card with home loan rates.

Loan Agreement
A legal contract that outlines the terms and conditions of your home loan.

Payout Figure
The total amount needed to fully repay your home loan, including fees and outstanding interest.

Discharge Fees
Fees charged when you pay off or refinance a home loan and end the mortgage.

Lenders Mortgage Insurance (LMI)
Insurance that protects the lender (not you) if you default on your loan. Often required if your deposit is less than 20%.

Mortgage Duty
A government tax on mortgages (now abolished in some states). Used to apply on the amount secured.

Mortgage Protection Insurance
Optional insurance that covers repayments in case of death, illness, or unemployment — not the same as LMI.

Holding Deposit
A small sum paid to show you're serious about buying — usually refundable and holds the property until contracts are signed.

Deposit Bond
A guarantee used instead of a cash deposit when signing a contract, usually helpful if your deposit is tied up in your existing home or super.

Stamp Duty
A state tax on property purchases, calculated on the value or price of the home. Can be a big upfront cost.

Conditional Approval (aka Pre-Approval)
An estimate from a lender of how much you can borrow, based on your financial snapshot. It's not a guarantee, but helps with property search.

Credit Report
A record of your credit history, including loans and repayment behaviour. Used by lenders to assess your creditworthiness.

Loan-to-Value Ratio (LVR)
A percentage showing how much you’re borrowing compared to the property’s value. Lower LVR often means better rates and less risk.

Security (Collateral)
The property (or asset) a lender can take if you default on the loan.

Serviceability
A lender’s measure of your ability to repay a loan, based on your income, debts, and expenses.

Family Pledge / Guarantor Loan
When a family member offers part of their property’s equity to help secure your loan and reduce your LVR.

Amortisation Period
The total length of time it takes to fully repay your home loan through scheduled repayments, including interest.

Valuation
An official estimate of a property’s market value, used by lenders before approving your loan.

Buyer’s Market
A real estate market where more properties are for sale than there are buyers. Typically leads to lower prices and more negotiation power for buyers.

Seller’s Market
A market with more buyers than properties — often leads to higher prices and faster sales.

Certificate of Title
A legal document showing property ownership and any legal claims, restrictions, or mortgages on it.

Private Treaty Sale
A common way of selling property where you negotiate price and terms directly with the seller.

Settlement
The final step in buying property. Legal ownership is transferred, and payments are completed.

Strata Title Inspection
Important if buying an apartment or townhouse — checks financials and rules of the strata (shared ownership) scheme.

Upgrading
Selling your current home to move into a larger or more valuable one.

Pre-Purchase Considerations
Checks and inspections to do before buying, like pest/building inspections and title searches.

Basis Points
Used to describe interest rate changes. One basis point = 0.01%. For example, 50 basis points = 0.50%.

Reserve Bank of Australia (RBA)
Australia’s central bank. It sets the cash rate and helps maintain financial stability.

Inflation
The rate at which prices increase over time. It affects interest rates, set by the Reserve Bank of Australia (RBA).

Cash Rate

The cash rate is the interest rate set by the Reserve Bank of Australia (RBA), which influences the cost of borrowing money across the economy. Changes to the cash rate affect mortgage rates, loan repayments, and overall economic activity. It's reviewed monthly by the RBA.

Negative Gearing
When investment property expenses exceed income. The loss can sometimes be claimed against your taxable income.

Lenders Mortgage Insurance (LMI)
Insurance that protects the lender (not you) if you default on your loan. Often required if your deposit is less than 20%.

Mortgage Protection Insurance
Optional insurance that covers repayments in case of death, illness, or unemployment — not the same as LMI.

First Home Super Saver Scheme (FHSS)
An Australian Government initiative letting first home buyers save part of their deposit via superannuation with tax advantages.

SMART Goals
A framework to set effective savings goals: Specific, Measurable, Achievable, Relevant, Time-bound.

Cooling-Off Period
A window (varies by state) where buyers can withdraw from a purchase contract. Usually doesn’t apply to auctions.

Conveyancer / Solicitor
A legal professional who manages the paperwork and legal process of transferring property ownership.

Certificate of Title
A legal document showing property ownership and any legal claims, restrictions, or mortgages on it.