A plain-English glossary.

Amortisation — The gradual repayment of a loan through scheduled principal and interest payments over time.

ACL / Credit Rep — Australian Credit Licence (or Credit Representative number under a licensed lender). Any brokerage providing consumer credit services must hold or operate under one.

Bridging finance — A short-term loan facility that covers the gap between buying a new property and selling an existing one. See bridging finance.

Comparison rate — A rate designed to include the effect of some fees and charges in addition to the interest rate. Imperfect, but more representative than the headline rate alone.

Discharge fee — A fee the outgoing lender charges to close out a mortgage when you refinance or pay it out.

Equity — The difference between your property's current value and the balance of the loan secured against it.

FHOG — First Home Owner Grant. A government grant for first-home buyers of newly built property, with rules and amounts varying by state.

Fixed rate — An interest rate locked in for a defined period (1-5 years typically), after which the loan reverts to a variable rate.

Guarantor — A family member who pledges equity in their own property as additional security for your loan. See guarantor loans.

Interest only (IO) — A loan where you only pay the interest for a set period, not the principal. See interest only.

LMI — Lenders Mortgage Insurance. A one-off premium charged when the LVR exceeds 80%. See low deposit & LMI.

LRBA — Limited Recourse Borrowing Arrangement. The required loan structure for SMSF borrowing. See SMSF loans.

LVR — Loan to Value Ratio. The loan amount expressed as a percentage of the property's value.

Offset account — A transaction account linked to your mortgage. The balance reduces the interest you pay on the loan, without actually paying down the principal.

Pre-approval — A formal, credit-checked position from a lender indicating the amount you can borrow, subject to the specific property. See pre-approval.

Principal and interest (P&I) — A loan where each payment reduces both the interest and the principal balance.

Redraw — A feature that lets you access extra repayments you've made on a loan.

Refinance — Replacing an existing loan with a new loan, usually at a different lender or structure. See refinancing.

Serviceability — The lender's assessment of whether you can afford the loan based on income, expenses, and existing debts.

Split loan — A loan divided into portions with different rate types (e.g., part fixed, part variable) or purposes.

Stamp duty — State government tax on property transfers. Varies by state and buyer profile. Use the VIC calculator.

Variable rate — An interest rate that moves with market conditions and lender pricing decisions.