Property Loan dictionary (L to Z)

Lenders Mortgage Insurance (LMI)

Lenders Mortgage Insurance (LMI) is a one-off insurance payment which covers us in case you can’t make your repayments. Required for home loans with a loan to value ratio (LVR) over 80%.

Line of credit

Line of credit is a transaction account with a credit limit. While there’s no fixed repayment, you need to make payments to cover the interest and fees on the loan. Loan agreement (or facility agreement) The contract between you and the lender which sets out the terms and conditions of your loan.

Loan to Value Ratio (LVR)

Your loan amount divided by the appraised value of the property. Example? If your property valuation is $300,000 and your loan is $240,000, then the LVR is 80%.

Lump sum payment

An unscheduled extra repayment made to your loan. Monthly service fee A fee you pay each month on your loan account.



Your home loan. A document we use as security for your loan.



That’s us—we're the ones who make the loan (and hold a mortgage as security).



That’s you—you are repaying the loan (and you give us a mortgage as security).


100% offset

100% Offset is a transaction or deposit account that's linked to your loan so it ‘offsets’ the loan principal. How does it work? If your loan is $180,000 and you have $5000 in your transaction account, then interest for that month is calculated on $175,000.



The ability to ‘move’ a loan from one security (property, term deposit, etc.) to another. For instance, you can use your current loan to buy a new home, then swap the security from your current loan to your new home.



Any extra loan payments you make on top of your scheduled repayments.


Prepayment fee

You may pay this if you pay out your loan in full during a fixed interest rate period, or if you make extra payments. Only applies to fixed rate loans.


The amount still owing on your loan (note: interest is calculated on the principal).


Principal and interest repayments

A repayment structure where you repay not only the interest, but start chipping away at the principal.

Property value

Your property value as determined by us. We could use your property's purchase price, get an external valuer in, or else do our own valuation.

Rate Lock

Let’s you lock in a fixed interest rate quote for three months when your loan's approved. If interest rates go up before the loan drawdown date, you’re guaranteed the original rate.


A loan feature that lets you withdraw any extra repayments you may have made. Access these funds easily online.



Where you pay off an existing loan—and set up a new one. Repayments The amount your loan contract says you must pay at an agreed time (like fortnightly or monthly).

Repayment holiday

If you’re ahead in your repayments, you can apply for a break—a 'holiday'—on your repayments.



An asset (eg. property, term deposit etc.) that's used to secure your loan.


The process where you finishing up either selling—or buying—a property.


Split loans

Splitting your loan into more than one loan account—one could be fixed rate, the other, variable.


Split loans

Splitting your loan into more than one loan account—one could be fixed rate, the other, variable.


Stamp duty

Stamp duty is a tax you pay to the state or territory government when a property is sold.



The length of your loan—usually 15, 20 or 30 years. Valuation The value of your property as determined by us, or by an independent valuer.

Variable interest rate

Where your loan's interest rate can move up or down. Your minimum repayments might increase if this happens.

Marlene Liontis
Tuesday, 5 February 2019

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