Mortgage terms,
in plain English.

The percentage of the property value you're borrowing. A $400,000 loan on a $500,000 property is 80% LVR. Most lenders require LMI above 80% LVR.

Insurance that protects the lender (not you) if you default on a loan with an LVR above 80%. It can be paid upfront or capitalised into the loan.

A transaction account linked to your home loan. The balance reduces the interest charged on your loan dollar-for-dollar.

A rate that combines the interest rate and most fees into a single percentage, making it easier to compare loans. Required by law to be displayed alongside advertised rates.

Allows you to withdraw extra repayments you've made on your loan above the minimum required. Useful for accessing funds when needed.

A repayment type where each payment covers both the loan principal and the interest. Pays the loan off over the term.

A repayment type where payments cover only the interest for a set period (usually 1–5 years). The principal doesn't reduce.

A one-off government payment (typically $10,000 in Victoria) for eligible first home buyers purchasing or building a new home.

A federal scheme allowing eligible first home buyers to purchase with as little as 5% deposit and no LMI, with the government guaranteeing the loan above 80% LVR.

A scheme allowing first home buyers to make voluntary contributions to superannuation and withdraw them to buy a first home, taxed concessionally.

A state government tax on property purchases. First home buyers may be eligible for exemptions or concessions under value thresholds.

Using one property as security for multiple loans. Can limit flexibility and increase risk — we review this for investors.

A loan that uses alternative income evidence (BAS, bank statements, accountant's declaration) instead of full tax returns. For self-employed borrowers.

A larger final payment at the end of a loan term that lowers regular repayments. Common in chattel mortgages and car loans.

A loan where the borrower owns the asset and the lender holds a mortgage over it. Common for vehicle and equipment finance.

When an investment property's expenses exceed its income, creating a tax-deductible loss. Common strategy for Australian property investors.

Conditional approval from a lender for a borrowing amount, valid for 3–6 months. Lets you bid at auction with confidence.

Full loan approval after the lender has valued the property and verified all documentation. The final step before settlement.

The process of transferring property ownership and finalising the loan. Usually 30–90 days after contract signing.

The legal process of transferring property title. Handled by a conveyancer or solicitor.

A family member who uses their property as additional security for your loan, potentially letting you borrow with a small or zero deposit and no LMI.

Interest that is added to the loan balance rather than being paid as you go. Common in construction loans during the build period.