Property & finance glossary

The process of gradually paying off a loan through regular repayments that cover both principal and interest over the loan term.

Available redraw is the amount a lender currently allows you to withdraw from extra home-loan repayments, subject to the loan terms.

An ABS measure of average gross employee earnings at a point in time. The headline full-time adult ordinary-time series is not a median, a typical salary or a lender income assessment.

The share of known auction outcomes reported as sold. Provider rules vary, so check the sample, reporting coverage and whether the result is preliminary or final.

A legal duty requiring mortgage brokers to act in a consumer's best interests when providing credit assistance and to prioritise the consumer where interests conflict.

The legal entity that manages a strata-titled property (apartments, units, townhouses). Also called owners corporation in some states. Body corporate fees fund shared maintenance and insurance.

The maximum loan amount a lender will approve based on your income, expenses, existing debts, and the loan terms. Also called borrowing capacity.

The share of potential rent needed to cover specified annual cash costs. The result depends on which expenses, loan payments and rent-linked fees are included.

A short-term loan that allows you to purchase a new property before selling your existing one. Typically more expensive than standard home loans.

A professional visual assessment of accessible building elements and visible defects before purchase. Timber pests, electrical systems, plumbing, asbestos and other specialist checks may require separate reports.

Tax on the profit made when selling an investment property. A 50% discount applies if the property was held for more than 12 months. The main residence is generally exempt.

A tax deduction spread over time for eligible building construction costs. It is based on construction expenditure, not a property purchase price.

The increase in an asset's value over time. For property, it is a change in value before selling costs, tax, finance and holding costs, and it can be negative.

The interest rate target set by the Reserve Bank of Australia for unsecured overnight loans between banks. It influences, but is not the same as, a retail home loan rate.

A legal notice registered on a property title that warns others of an interest or claim. It can prevent the property from being sold or transferred until resolved.

A rate that includes the interest rate plus most fees and charges, designed to help borrowers compare home loan costs across different lenders.

Interest calculated on both the initial principal and interest already added in earlier periods. Australian home-loan interest is commonly calculated daily and charged monthly; product terms determine the exact method.

The legal agreement between buyer and seller that sets out the terms and conditions of a property purchase, including price, settlement date, and any special conditions.

The legal process of transferring property ownership from seller to buyer. Handled by a licensed conveyancer or solicitor.

A period after signing a contract of sale during which the buyer can withdraw (usually with a small penalty). Varies by state — typically 2-5 business days. Does not apply to auction purchases.

Fees charged by local council for services such as rubbish collection, road maintenance, and community facilities. Paid quarterly or annually by the property owner.

Total known debt divided by gross annual income. It is one lender risk measure, but it is not the same as serviceability or an individual approval cutoff.

A fee that may be deducted when a resident permanently leaves a retirement village. It may also be called a departure or exit fee, and its amount depends on the contract and applicable state or territory rules.

The upfront amount paid toward a property purchase, typically 5-20% of the purchase price. A deposit below 20% usually requires Lenders Mortgage Insurance (LMI).

For rental property, depreciation commonly refers to deductions for eligible capital works and the decline in value of eligible assets. Conditions and exclusions apply.

The value used to calculate transfer duty. For a typical Australian property transfer, it is generally the higher of the consideration paid and the property's unencumbered market value, subject to each jurisdiction's rules.

An easement gives another party specified rights to use land, such as access or drainage. Its terms and location matter when buying or renovating.

The difference between your property's current market value and the amount you owe on your mortgage. Equity increases as you repay the loan or as the property value rises.

A payment above the minimum scheduled home-loan repayment. It usually reduces principal and future interest, but limits, fees and access through redraw depend on the loan terms.

A one-off government payment to eligible first home buyers. The amount and eligibility criteria vary by state and territory.

A home loan interest rate that stays the same for an agreed period. The fixed period can be shorter than the loan term, and fees and product restrictions still matter.

Freehold is ownership of land rather than a lease for a set term. It does not establish that a property has no shared obligations or restrictions.

When a seller accepts a higher offer from another buyer after already accepting your offer but before contracts have been exchanged.

The annual rental income from a property expressed as a percentage of the property's value, before deducting expenses.

A person (usually a parent) who pledges their own property as additional security for your home loan, helping you avoid LMI or borrow a higher amount.

The housing group within the Australian Consumer Price Index. It measures price changes for new owner-occupier dwellings, rents and housing services, not established home prices, land or mortgage interest.

A loan repayment structure where you pay only the interest for a set period. The loan balance does not reduce during the IO period.

An annual state government tax on the value of land you own (excluding your primary residence in most states). Rates and thresholds vary by state.

A contract that lets a resident occupy a dwelling for life or an indefinite period, usually without full ownership rights and with limited or no equity. It is common in retirement villages.

Insurance that protects the lender (not the borrower) if you default on your loan. Required when borrowing more than 80% of the property value (LVR above 80%).

The loan amount expressed as a percentage of the property value. An LVR above 80% typically triggers LMI. Lower LVR means less risk for the lender.

The middle price point when all property sales in a suburb or city are ranked from lowest to highest. Half sold for more, half for less.

A licensed professional who compares home loan products from multiple lenders on your behalf and helps you apply. Paid by commission from the lender.

Negative gearing describes borrowing to invest when rental income does not cover the relevant costs, including interest. Tax treatment depends on the applicable rules and circumstances.

The annual rental income minus all expenses (rates, insurance, management fees, repairs), expressed as a percentage of the property's value.

A transaction account linked to your home loan. The balance in the offset account is deducted from the loan principal when calculating interest, reducing interest charges.

An Australian National Accounts measure covering specified legal and professional fees, property commissions, stamp duty and local government charges associated with transfers of dwellings, non-dwelling construction and unoccupied land.

A conditional agreement from a lender indicating how much they are willing to lend you, subject to property valuation and final checks. Typically valid for 3-6 months.

The original amount borrowed, excluding interest. In a principal and interest loan, each repayment reduces the principal over time.

A formal assessment of a property's market value by a licensed valuer. Lenders require a valuation before approving a loan to ensure the property is worth the purchase price.

The interest rate a home loan moves to when its fixed period ends, unless a different arrangement is made.

A feature that allows you to withdraw extra repayments you have made on your home loan. Unlike an offset account, redraw access may have restrictions or fees.

Rental cash flow is rent received minus cash payments for a property over a stated period. Say whether loan repayments and tax are included.

The annual return on a property investment calculated as a percentage of its value. Can be gross (before expenses) or net (after expenses).

The minimum price a seller will accept at auction. If bidding does not reach the reserve, the property is passed in and may be negotiated privately.

A home loan divided into separate portions, commonly with one fixed rate and one variable rate. Each portion needs its own repayment estimate.

The gap between a savings target and money available for that target. For a house purchase, separate the deposit from buying costs and money reserved for other needs.

The final stage of a property transaction where ownership is officially transferred, the balance of the purchase price is paid, and the buyer receives the keys. Typically 30-90 days after contract exchange.

A statistical series with recurring calendar and seasonal effects estimated and removed, making adjacent months or quarters easier to compare. Irregular one-off movements can remain, and earlier estimates may be revised.

A statutory valuation of land used for purposes such as land tax. It generally excludes buildings, but the exact treatment of site works and the term used varies by jurisdiction.

A state government tax (also called transfer duty) paid when purchasing property. The amount depends on the property price, state, buyer type, and whether concessions apply.

A form of ownership for multi-unit properties where you own your individual lot plus a share of the common property. Governed by a body corporate or owners corporation.

A check of the property's title records to confirm ownership, identify any encumbrances (mortgages, easements, caveats), and ensure the seller has the right to sell.

An ABS measure of underlying inflation calculated from the weighted middle 70% of seasonally adjusted CPI price movements after trimming the largest rises and falls.

An estimate of loan repayments plus included fees over the modelled term. Check whether the total includes the principal borrowed.

Another name for stamp duty — the tax paid to the state government when property ownership is transferred.

When an agent advertises a property at a price significantly below the seller's expected selling price or the agent's own estimate, in order to attract more buyers. This is illegal in some states.

A modelling assumption that reduces scheduled rent to allow for periods without a paying tenant. It is not a published rate for an individual property or a tax rule.

An independent assessment of a property's market value. Bank valuations are used for lending decisions; independent valuations may be used for tax, insurance, or legal purposes.

A home loan interest rate that can change over time based on market conditions and lender decisions. Offers more flexibility than fixed rates but less repayment certainty.

The seller of a property. In legal documents and at auction, the seller is typically referred to as the vendor.

Local government regulations that determine how land can be used — residential, commercial, industrial, mixed-use, etc. Zoning affects what can be built on a property and its potential value.