100% Offset

The balance of an offset account is “balanced” against the outstanding debt when interest is calculated

Amortisation Period

The period of time one has to repay a loan at the arranged terms

Application Fee

A fee charged to cover the cost of processing an application

Arrears

An Overdue account that remains outstanding

Assets

Money, Property or Goods owned

Balance Sheet

A snapshot of an entities statement of assets, liabilities & net equity for any one day in time

Bank Swap Bill Rate

A market rate used to price commercial borrowings, can also show trends for variances in home loan rates & is readily available in most national newspapers

Basic Variable

No Frills, usually comes without “features”

Basis Points

A term used to measure the rate of interest. E.g. 10 basis points equals .10%

Certificate of Title

This document details the land size, ownership details & encumbrances

Company Title

A property title that applies when owners of a unit block form a company

Comparison Rate Schedule (CSR)

This rate reflects the total cost of your loan, it is also known as the AAPR, or True Rate. Is meant to be used for apples to apples comparison. Takes into account the annual interest rate plus some of the lender’s fees & Charges

Construction Loans

Construction loan are usually Interest only loans whilst construction is taking place. These loans are usually paid in instalments once the builder has finished each section. These payments are called progress payments & depending on the Lender will usually be 5 in total as per the each stage on the building contract. The BSA has a formula for each stage payment. Lenders usually convert to Principal & Interest after construction is completed.

Consumer Credit Code

The legislation designed to protect the rights of individuals who are borrowing for personal purposes

Contract of Sale

A written agreement outlining he terms of sale between a seller & a buyer

Conveyancing

The Legal process of transferring the property ownership

Daily Interest

Interest is calculated on a daily basis – varies according to daily balances

Debt Service Ratio (DSR)

This is a calculation to measure the borrower’s capacity to repay the loan. Lenders calculate the DSR by taking into account a borrower’s expenses as a percentage of their income

Development Funding

This is a specific style of loan facility designed in such a way that it is possible to obtain monies to assist with the development of small to large buildings, commercial and industrial properties, subdivisions. They are structured in such a manner that they will only last for the period of the development.

Direct Debit

The act of debiting a borrower’s nominated account to pay mortgage or any other repayments

Discount Variable

Usually a “cheaper” rated product with either a discount for the life of the loan or for a pre-determined period