If you make more than the required mortgage or loan repayment necessary.
The interest rate offered by a lender, not including any other fees and charges.
An electronic banking outlet, which allows customers to complete basic transactions without the aid of a branch representative or teller.
Multiple loans provided under a single loan contract. May have a portion variable, a portion fixed or even a portion as a line of credit.
An interest rate that incorporates upfront and ongoing fees and charges payable over the life of the loan. By looking at the comparison rate, it will assist you in identifying the true cost of a loan.
A small plastic card issued by a finance lender, allowing the holder to purchase goods or services on credit.
The approved amount a lender will lend you for a loan or credit card.
A great way for people to plan events in their life by reducing their payments instead of paying off their property loan earlier. This type of strategy is great, if for example, you are planning to have a family in a few years and you are both currently working, but planning to base your budget on only one of you working when you have a family. While you are both working you pay as much as you can off your property loan and the payments reduce each time to payout the loan at nominated term. When you reach the payment amount you have budgeted for on one wage, you met your goal and have your family. When you both start working again you can put as much as you like on the loan again. Dynamic Repayments is a feature that allows for the amortisation of a loan on a monthly basis, based on the loan balance at the time. If activated on your loan, any additional payments made will be used to reduce the regular principal & interest repayment amount, as opposed to reducing the amount of time to pay off the loan. Regardless of the frequency, the recalculation of the repayments will occur once a month on the interest charge date
A loan or mortgage with an interest rate that will remain at a predetermined rate for the entire term it is fixed for.
The amount charged by a lender for the use of borrowed money.
A loan where only interest is paid for an agreed period of time. This means that no principal is paid in the repayment for that period.
Loan = $100,000 interest rate is 7% term is 5 years. $100,000 x 0.07 = $7,000pa interest , after 5 years you still owe $100,000 as you are only paying interest. To calculate monthly interest, you divide the yearly interest by 365 days and then multiply by the days in the month.
Interest Only $7,000pa / 365 = $19.178082 per day x (September) 30 days = $575.35 payment for 30 day month. 31 Day month = $7,000pa / 365 = $19.178082 per day x 31 = $594.53 payment for 31 day month.
The percentage of the loan, used to calculate the interest that is to be paid.
Online banking (or internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.
The total amount you still owe on your loan.
An agreement between a borrower and a lender that allows the borrow to lock in the interest rate on a mortgage over a specified time period at an agreed rate, prior to the borrowers loan settling. The lender may charge a lock fee, which the borrower must pay if they want to lock in an interest rate, prior to settlement of their loan.
A flexible ongoing loan arrangement. Permits customer transactions within the specified credit limit. Works like a credit card, but with property interest rates.
Insurance taken out by a lender to protect itself from default by a borrower. LMI is normally payable by the borrower when the LVR exceeds 80%. This insurance is for the Lender and covers the lender in case the borrower defaults and the property is sold for under what is owed. The Insurance pays the lender for any loss, and in most cases, then chases the borrower to make up any lost funds. This insurance normally only covers the lender NOT the borrower.
The percentage borrowed compared to the value of the property. Example – If the property is worth $100,000, and you borrow, loan $80,000, then the LVR is 80%. To work out the LVR divide the loan amount into the valuation amount, or value of the property amount. $80,000 / $100,000 = 80
The maximum loan amount that can be borrowed based on the borrower’s disposable income.
The minimum loan amount that a lender is able to borrow.
A facility that is linked to a home loan. The balance of your offset account reduces the amount owing on your loan.
An offset account where 100% of the balance offsets your loan account. This type of account enables you to have every cent of your money working to reduce your mortgage.
Telephone banking is a service provided by a financial institution, which allows its customers to perform transactions over the telephone.
If you have a property loan and want to sell your current property and purchase a new property and transfer your current loan to the new property, this is portability; however there are rules. Exchange and settlement for both properties need to occur on the same day and at the same time. In many cases the loan amount has to be the same or lower.
A loan in which both principal and interest are repaid during the agreed term of the loan. Each repayment is comprised of interest plus a reduction in the loan principal.
The amount owing on a loan in which interest must be paid, the principal portion of the loan repayment reduces the overall loan balance on the loan.
Available with variable loan products, it enables a borrower to redraw any additional funds, over and above the minimum payments made on their loan.
To change mortgage providers, lenders, and arrange for a new loan to be taken over the same property.
A tax imposed by State Government on the purchase price of a property.
Details which outline specific obligations of each party with regards to a loan contract, transaction, product or service.
Charges imposed by State Government to conduct a title search on property ownership. A title search is necessary on both refinance and purchase settlements.
Charges imposed by State Government to transfer the registered mortgage on title.
An entity created to hold assets for the benefit of defined individuals or groups and managed by a trustee.
An estimation of something’s worth conducted by a registered professional.
An interest rate that can change on a periodic basis, may go up or down. A rate that can fluctuate over the life of the loan contract. Changes to the variable interest rate may result in a change to the loan repayment amount.