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Australian Mortgage Dictionary

Every term, in plain English

From LVR to debt recycling — Australian mortgage terms defined by people who do this every day.

No jargon. No hype. Just clear answers.

Home loans have a language of their own. Some words matter more than others, and some mean the opposite of what they sound like. This glossary is our attempt to cut the noise — every term defined in plain English, with the Australian context that actually applies to you.

A

8 terms

ACL (Australian Credit Licence)

The licence that lets a business legally arrange home loans in Australia.

Legal & Process

ACR (Authorised Credit Representative)

A broker operating under someone else's credit licence — Australia's standard structure.

Legal & Process

AHPRA Registration

Your healthcare registration is the credential that unlocks medico lending policies.

Medico Lending

Amortisation

How your loan pays down — and why early repayments matter far more.

Loan Types & Features

Application Fee

A one-off processing fee — often waived with the right lender choice.

Loan Types & Features

APRA (Australian Prudential Regulation Authority)

The regulator whose rules quietly shape how much every Australian can borrow.

Legal & Process

Assessment Rate

The higher rate lenders test you at — not what you actually pay.

Loan Types & Features

Auction

Unconditional contract, 10% deposit, no cooling-off. Have finance sorted first.

Legal & Process

B

8 terms

Body Corporate

The owners' entity managing strata buildings — and fees reduce borrowing capacity.

Home Buying Basics

Break Costs

The fee for exiting a fixed loan early. Can reach five figures.

Loan Types & Features

Bridging Loan

Short-term finance covering the gap between buying your next home and selling.

Loan Types & Features

Budget (Federal) — Impact on Property

Each May, federal budgets reshape CGT, gearing rules, and first-home schemes.

Tax & Government

Buffer Rate

The 3% margin APRA adds to your rate when testing serviceability.

Loan Types & Features

Builder's Warranty Insurance

Protects homeowners if their builder goes under mid-build. Required by state law.

Insurance

Building Insurance

Covers the physical structure — and every lender requires it before settlement.

Insurance

Buyer's Agent

A licensed professional who represents the buyer, not the seller, in a purchase.

Home Buying Basics

C

16 terms

Capital Growth

The rise in a property's value over time — as distinct from rent.

Wealth & Investment

Capitalised Interest

Interest added to the loan balance instead of paid in cash.

Loan Types & Features

Cash-back Offer

A lump-sum bonus from a lender — easy to miscalculate in isolation.

Loan Types & Features

Caveat

A legal warning lodged on a property title that can stall settlement.

Legal & Process

Capital Gains Tax (CGT)

The profit tax on selling an investment property. Your PPOR is generally exempt.

Tax & Government

Comparison Rate

The true cost of a loan, fees included. Not the headline.

Loan Types & Features

Conditional Approval

Indicative lender approval subject to conditions. Not binding for auctions.

Legal & Process

Construction Loan

Staged finance for building a home — interest only on what's drawn.

Loan Types & Features

Consultant (Medical)

A fully qualified specialist — the strongest lending profile in Australia.

Medico Lending

Contract of Sale

The binding agreement between buyer and seller. Get it reviewed before signing.

Legal & Process

Conveyancing

The legal transfer of property ownership — a non-negotiable cost at purchase.

Legal & Process

Cooling-Off Period

A statutory window to back out of a private-treaty contract. Varies by state.

Legal & Process

Credit File

Your borrowing history across the three credit bureaus. Check before applying.

Legal & Process

Credit Policy

Every lender's internal rulebook — and why answers differ lender to lender.

Legal & Process

Credit Score

A 0–1,200 summary of creditworthiness. Most prime lenders want 600+.

Legal & Process

Cross-collateralisation

One loan secured by multiple properties — efficient in theory, painful in practice.

Wealth & Investment

D

9 terms

Debt Recycling

Turning non-deductible home loan debt into tax-deductible investment debt — slowly.

Wealth & Investment

Deposit

The cash portion you bring to a purchase — drives rate, LMI, and eligibility.

Home Buying Basics

Deposit Bond

An insurer's guarantee substituting cash at exchange. Useful when savings are locked.

Home Buying Basics

Depreciation Schedule

The quantity-surveyor document unlocking thousands in investment property deductions.

Tax & Government

Discharge

The process of paying out a loan and releasing title. 2–3 weeks.

Legal & Process

Drawdown

The act of accessing loan funds — lump sum or staged over a build.

Loan Types & Features

Debt-to-Income Ratio (DTI)

Your total debt divided by income. Lenders cap it at 6x or 7x.

Loan Types & Features

Dual Occupancy

Two dwellings on one land title. Can double rental yield on a single parcel.

Wealth & Investment

Due Diligence

Every check before contract — inspections, strata, title, overlays. Skip at your peril.

Legal & Process

E

6 terms

Easement

A registered right for others to use part of your land.

Legal & Process

Encumbrance

Any registered claim or restriction on a property title.

Legal & Process

Expressions of Interest (EOI)

A sealed-offer sales campaign — buyers submit written bids by a deadline.

Legal & Process

Equity

Your property's value minus what you owe — the biggest wealth lever most households have.

Wealth & Investment

Equity Release

Borrowing against your home's built-up equity. Structure matters hugely.

Wealth & Investment

Establishment Fee

A one-off $200–$800 set-up charge. Often waived under the right package.

Loan Types & Features

F

9 terms

Family Home Guarantee

Lets eligible single parents buy with a 2% deposit and no LMI.

Tax & Government

Fellowship (Medical)

The final stage before consultancy — income sits between registrar and consultant.

Medico Lending

First Home Guarantee (FHG)

5% deposit, no LMI, government guarantee. For eligible first-home buyers.

Tax & Government

First Home Owner Grant (FHOG)

State cash grant for first-home buyers — usually new builds only.

Tax & Government

First Home Super Saver Scheme (FHSS)

Save for a deposit through super at concessional 15% tax rates.

Tax & Government

FIRB (Foreign Investment Review Board)

Approval required for most foreign buyers of Australian property.

Tax & Government

Fixed Rate

A rate locked in for a set period — certainty over flexibility.

Loan Types & Features

Foreign Income

Overseas earnings accepted by many lenders — usually discounted to around 80%.

Loan Types & Features

Future Income

Lets registrars borrow on their projected consultant earnings, not today's pay.

Medico Lending

G

6 terms

Gearing (Negative)

When holding an investment costs more than it earns. Loss is tax-deductible.

Wealth & Investment

Gearing (Positive)

When rental income exceeds holding costs. Taxable — but cash positive.

Wealth & Investment

Genuine Savings

Funds you've accumulated yourself — required when deposit is under 20%.

Home Buying Basics

Granny Flat

A second dwelling on your title. Can lift rental yield by 40–60%.

Wealth & Investment

GST on Property

Applies to new builds, commercial, and developer vacant land — not most resales.

Tax & Government

Guarantor Loan

Family equity as extra security — lower deposit, and LMI avoided.

Loan Types & Features

H

4 terms

HECS/HELP Debt

Reduces borrowing capacity for most — but not for medicos under our policy.

Legal & Process

Help to Buy (Shared Equity)

Government co-owns up to 40% of your home to help you enter the market.

Tax & Government

Honeymoon Rate

A low intro rate that reverts higher. Check the revert carefully.

Loan Types & Features

House & Land Package

Vacant land and a construction contract bundled — two staged settlements.

Loan Types & Features

I

7 terms

Income Protection Insurance

Pays 70–75% of income if illness or injury stops you working.

Insurance

Income Verification

The documents lenders need to confirm your earnings. Varies by employment type.

Loan Types & Features

Inflation (CPI)

The price-change measure driving RBA decisions — and your variable rate.

Wealth & Investment

Interest Rate

The cost of borrowing. Not the only thing to compare.

Loan Types & Features

Introductory Rate

A short-term discounted rate — always check the revert.

Loan Types & Features

Investment Loan

Priced higher than owner-occupier. Structure at origination saves years later.

Wealth & Investment

Interest-Only Loan (IO)

Repayments cover interest only, not principal. Common for investors.

Loan Types & Features

J

1 term

Joint Tenants

Equal ownership with right of survivorship. Common for couples.

Legal & Process

K

1 term

Knockdown Rebuild

Demolish an old home and build a new one on the same land.

Wealth & Investment

L

8 terms

Land Tax

Annual state tax on investment property land value. PPOR generally exempt.

Tax & Government

Line of Credit

A revolving credit facility secured by your home. Like a big overdraft.

Loan Types & Features

Lenders Mortgage Insurance (LMI)

The insurance you pay when your deposit is under 20%.

Home Buying Basics

LMI Waiver

Qualifying professionals skip LMI even at 90% LVR. $15K–$45K saved.

Medico Lending

Loan Portability

Keep your loan when you move. Saves fees, preserves a good rate.

Loan Types & Features

Locum (Medical)

Temporary medical work — every lender treats the income differently.

Medico Lending

Low-Doc Loan

For self-employed borrowers without standard tax returns. Uses alternative evidence.

Loan Types & Features

LVR (Loan-to-Value Ratio)

Your loan as a percentage of your property value.

Home Buying Basics

M

7 terms

Medical professional? Your terms work differently.

HECS treatment, LMI waivers, future income acceptance — our medico policy rewrites the rulebook for doctors, dentists and allied health.

See medico terms

Medico Policy

Specialist lending policy for medical and allied health — LMI waiver, HECS exclusion, future income.

Medico Lending

Mortgage

The legal charge on title; the home loan is the debt itself.

Home Buying Basics

Mortgage Broker

A licensed professional comparing 45+ lenders on your behalf. Free to you.

Home Buying Basics

Mortgage Protection Insurance

Covers your repayments if you can't work. Compare with income protection.

Insurance

Mortgage Stress

Spending over 30% of gross income on repayments. A blunt measure.

Loan Types & Features

Mortgagee

The lender in a mortgage arrangement — holds security over the property.

Legal & Process

Mortgagor

The borrower in a mortgage arrangement — gives security to the lender.

Legal & Process

N

4 terms

NCCP (National Consumer Credit Protection Act)

Australia's federal consumer credit law — sets the best-interests duty.

Legal & Process

Neutral Cash Rate

The theoretical rate that neither stimulates nor restrains the economy.

Wealth & Investment

Non-Bank Lender

Lenders funded via wholesale markets — often cheaper, often more flexible.

Loan Types & Features

Novated Lease

Car finance from pre-tax salary — reduces tax, affects borrowing capacity.

Loan Types & Features

O

4 terms

Off-the-Plan

Contract now, settle when built. Valuation risk at settlement.

Home Buying Basics

Offset Account

A transaction account that reduces your interest — without locking your cash away.

Loan Types & Features

Owner Builder

You manage the build. Tougher finance, capped LVR, higher rates.

Loan Types & Features

Owner-Occupier

A loan for your own home — priced lower than investment loans.

Loan Types & Features

P

11 terms

P&I (Principal and Interest)

Each payment covers both interest and a slice of principal.

Loan Types & Features

PAYG

Pay As You Go — Australia's standard employment tax. Easiest to assess.

Loan Types & Features

PGY (Postgraduate Year)

Your medical training stage, from PGY1 intern to PGY5+ fellowship.

Medico Lending

Portfolio Loan

Master facility for multi-property investors with shared offset features.

Wealth & Investment

Principal Place of Residence (PPOR)

The home you live in. Generally CGT-exempt when you sell.

Tax & Government

Pre-Approval

Indicative lender approval. Strengthens an offer but isn't binding.

Legal & Process

Pre-Settlement Inspection

Final walk-through before handover. Last chance to raise issues.

Legal & Process

Principal

What you originally borrowed — and still owe. Reduced with each P&I payment.

Loan Types & Features

Private Treaty

The standard negotiated sale — offers, counter-offers, cooling-off rights.

Legal & Process

Professional Package

Bundled discounts and features for an annual fee. Usually pays from $250K+.

Loan Types & Features

Property Strategist

Plans long-term portfolio moves. Complements a broker, doesn't replace one.

Wealth & Investment

Q

1 term

Quantity Surveyor

Prepares the depreciation schedule that unlocks investment tax deductions.

Tax & Government

R

9 terms

Rate Lock

Holds your fixed rate between approval and settlement. For a fee.

Loan Types & Features

RBA Cash Rate

The benchmark shaping every Australian variable home loan rate.

Wealth & Investment

Redraw Facility

Access extra repayments you've made. Cheaper than offset, worse tax treatment.

Loan Types & Features

Refinance

Switch lender or restructure your loan. Judge on 3–5 year total cost.

Home Buying Basics

Regional First Home Buyer Guarantee

5% deposit, no LMI, for first-home buyers in regional areas.

Tax & Government

Registrar (Medical)

A doctor in advanced specialty training. Strong profile, often undersold.

Medico Lending

Rental Yield

Annual rent as a percentage of property value. Gross or net.

Wealth & Investment

Rentvesting

Rent where you want to live, invest where you can afford.

Wealth & Investment

Risk Fee

Some lenders' alternative to LMI. Different structure, similar economics.

Loan Types & Features

S

11 terms

Salary Packaging

Pre-tax salary directed to benefits — cuts tax, can cut assessed borrowing.

Medico Lending

Section 32 Vendor Statement

Victoria's mandatory vendor disclosure document. Review before signing.

Legal & Process

Self-Employed Loan

Home loans for business owners and contractors. Tougher income verification.

Loan Types & Features

Serviceability

Whether you can afford the loan — and every lender calculates it differently.

Loan Types & Features

Settlement

The legal completion of a property purchase — when funds and title transfer.

Legal & Process

SMSF Loan

Lets your Self-Managed Super Fund buy an investment property via LRBA.

Wealth & Investment

Split Loan

Splits your loan into fixed and variable portions — balance and flexibility.

Loan Types & Features

Stamp Duty

The state tax you pay when you buy property. Biggest cost after deposit.

Tax & Government

Strata Title

Ownership of your unit plus shared common areas. Common for apartments.

Home Buying Basics

Subdivision

Dividing one property into multiple titles. Complex finance and tax.

Wealth & Investment

Standard Variable Rate (SVR)

The lender's headline rate before discounts. Almost no one pays it.

Loan Types & Features

T

5 terms

Tenants in Common

Co-ownership with defined shares, inheritable by will. No survivorship.

Legal & Process

Title Deed

The legal document proving property ownership. Now held electronically.

Legal & Process

Title Insurance

Protects against title defects, boundary disputes, unauthorised works, and fraud.

Insurance

Title Search

Pre-settlement check revealing ownership, encumbrances, and restrictions.

Legal & Process

Top-up Loan

Increases your existing loan. Simpler and cheaper than full refinance.

Wealth & Investment

U

2 terms

Unconditional Approval

Full, formal loan approval. Required before bidding at auction.

Legal & Process

Upfront Costs

Every expense on top of your deposit — stamp duty, conveyancing, inspections.

Home Buying Basics

V

5 terms

Valuation

Independent property value assessment. Drives your LVR and loan approval.

Legal & Process

Valuer

Qualified professional assessing market value. Independent of seller and lender.

Legal & Process

Variable Rate

A rate that moves with the market. Maximum flexibility, rate risk on you.

Loan Types & Features

Vendor

The seller of a property. The term used across contracts and conveyancing.

Legal & Process

VMO (Visiting Medical Officer)

Specialist contracted to hospitals — income splits across multiple streams.

Medico Lending

W

1 term

Waived LMI

Lender policy that removes LMI at high LVRs for qualifying professions.

Medico Lending

Y

1 term

Yield

Annual rental income as a percentage of property value. See rental yield.

Wealth & Investment

Most asked

The terms everyone asks about

LVR

Your loan as a percentage of your property value.

LMI

The insurance you pay when your deposit is under 20%.

Comparison Rate

The true cost of a loan, fees included. Not the headline.

Offset Account

A transaction account that reduces your interest — without locking your cash away.

Debt Recycling

Turning non-deductible home loan debt into tax-deductible investment debt — slowly.

Stamp Duty

The state tax you pay when you buy property. Biggest cost after deposit.

People also ask

The questions behind the terms

LVR is the ratio — your loan divided by your property value. LMI is the insurance you pay when that ratio exceeds 80%. Example: on an $800K loan for a $1M property, your LVR is 80% and LMI is not required. At $850K, LVR becomes 85% and LMI applies.

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