Early Repayment Fee

Also known as Deferred Establishment Fee, a penalty, paid by the borrower, if a loan is discharged in a shorter period of time that the contract states. Most DEF’s are for the first 5 years

Equity

The amount of the property that is owned by the borrower

Equity Loans

This is a loan facility “name” that is directed to those people that have established equity in their home “asset”. This particular loans’ purpose is to unlock the equity for use by the borrower for any purpose. It is commonly utilised to purchase motor vehicles, swimming pools and other personal items or investment in shares ,and other worthwhile investments.

Extra Repayments

Making extra repayments, & not re-drawing them, can reduce the amount of interest you pay & reducing the years that you have left to pay off your mortgage. Check our calculator to see how much interest & time you can save by increasing you repayments

Fixed Rate

Gives you the ability to lock in a rate of Interest for a period of time. Most fixed rate loans don’t allow you to make extra repayments to the loan.

Funds To Complete

Additional funds required to complete the transaction E.g. Further deposit, Government duties, Solicitor’s costs Etc

Guarantor

A person/s that agree to be responsible for the repayment of another person’s debt.

Honeymoon Rate

A short term interest rate reduction

Interest

The Lenders charge for using the funds

Interest Only

Repayments are calculated so that there is no reduction to the principal for the period of time specified. Usually reserved for investment loans.

Investment Property

Property purchased for the use other than for self inhabiting. Interest portion, costs, etc can be tax deductible. Please check with your tax professional for further information

Lenders Mortgage Insurance (Payable by the borrower)

This is a type of insurance taken out on both investment & Owner occupied loans. It covers the lender against loss arising from the borrower’s default on Mortgage repayments & any subsequent loss on foreclosures

Line Of Credit

Just like a big Credit Card allows you to draw back to the limit over a set period of time. Repayments are usually interest only

Loan Agreement

The contract between the borrowers & the lender setting out the conditions that apply to your loan

Loan to Value Ratio (LVR)

This is the calculation of the loan amount divided by the security value, this calculation can be used for the calculation of Mortgage Insurance

Lo Doc

These loans are available to the borrower who does not have available, to a lender, a variety of documentation that a traditional facility would require.

Lo Doc Commercial

Similar to the above but borrowing purpose and security is predominantly for commercial reasons.

Mezzanine Funding

This style of funding is specifically used to assist purchasers with additional funds required to settle a purchase or complete a construction. These loans are usually short term and attract a higher the standard interest rate.

Mortgage

Registrable legal document providing security to the Lender

Mortgage Stamp Duty

Calculated on the amount of the loan payable to the Office of State Revenue Current rate is .4% + Business duty @ .03%

Mortgagee

The Lender/Funder

Mortgagor

The borrower &/or Guarantor

Negative Gearing

Where a return on an investment is insufficient to cover the overall costs of maintaining the investment inclusive of borrowings

Net Service Ratio

This is a calculation that measures the borrower’s capacity to repay the loan. The calculation takes into account living expenses & monthly repayments to give a ratio of income to expenses