Finance Glossary
LVR (Loan-to-Value Ratio)
The loan amount expressed as a percentage of the value of the property being purchased or used as security.
Serviceability
A lender's assessment of whether you can afford the repayments on a loan, based on your income, expenses, and existing debts.
Pre-Approval
A conditional indication from a lender of how much you may be able to borrow, before you have found a specific property or made a purchase.
Offset Account
A transaction account linked to your home loan, where the balance reduces the amount of loan principal you pay interest on.
Redraw Facility
A feature on some loans that allows you to withdraw extra repayments you have made above the minimum required amount.
Comparison Rate
A rate that combines a loan's interest rate with most fees and charges, intended to help compare the true cost of different loans.
Guarantor
A person (often a family member) who agrees to be responsible for loan repayments if the borrower is unable to meet them, sometimes using their own property as additional security.
Chattel Mortgage
A common finance structure for purchasing business equipment or vehicles, where the borrower owns the asset from settlement while the lender holds a mortgage over it as security.