1. Pre-Approval

A lender's conditional approval that estimates how much you can borrow. It gives you a clear budget when house hunting and makes your offer more competitive. Want to know how much you might be eligible to borrow? Try our Borrowing Power Calculator to get an estimate.

2. Loan-to-Value Ratio (LVR)

LVR is the percentage of your loan compared to the property's value. A lower LVR can mean better loan terms, while an LVR above 80% may require Lenders Mortgage Insurance (LMI).

3. Lenders Mortgage Insurance (LMI)

LMI is a one-off fee charged when your deposit is less than 20% of the property's value. It protects the lender, not you, but allows you to buy a home sooner with a smaller deposit.

4. Variable vs Fixed Interest Rates

• Variable Rate: Interest rates can change over time, affecting your repayments.

• Fixed Rate: Your rate stays the same for a set period, offering repayment stability.
  Unsure what your repayments might look like? Use our Mortgage Repayment Calculator to estimate your monthly costs.

5. Offset Account

A savings or transaction account linked to your home loan. The money in this account reduces the amount of interest you pay on your mortgage.

6. Redraw Facility

A feature that allows you to withdraw any extra repayments you've made on your loan. It provides financial flexibility while helping you reduce interest costs.

7. Comparison Rate

A percentage that includes both the loan's interest rate and most fees, giving you a clearer idea of the true cost of a loan.

8. Principal and Interest vs Interest-Only Loans

• Principal & Interest: Your repayments cover both the loan balance and interest, reducing your debt over time.

• Interest-Only: You only pay interest for a set period, keeping repayments lower initially but not reducing the loan balance.

9. Settlement

The final step in buying a property, where legal documents are finalised, funds are transferred, and ownership officially changes hands.

10. Refinancing

Switching your home loan to a different lender or product to secure a better rate, lower repayments, or access equity for other financial goals. Thinking about refinancing? Use our Refinance Savings Calculator to see how much you could save by switching to a better loan.

Ready to Take the Next Step?

Understanding these terms is just the beginning. Mortgage Matrix makes the home loan process simple, guiding you from application to settlement. Book a free appointment today and get expert advice tailored to your needs!