Jargon buster

Learn the language of home loans with our easy to follow jargon buster

Comparison rate

A rate that includes upfront and ongoing fees as well as the advertised interest rate. It will assist you in identifying the true cost of the loan.

Credit limit increase

Increasing the amount of money in your home loan.

Deposit Bonds

Are a guarantee or bond that substitutes for a cash deposit between signing contracts and settlements. Deposit bonds can be up to 10% of the purchase price and can be for all or part of the deposit amount required.


The difference between the amount owed on your home loan and your home’s value.

Fixed rate

An interest rate that allows you to lock in to a specific rate of interest, with fixed monthly repayments for a given period of time.

Interest only

A type of loan that requires repayments on the interest only and, as such, leaves the loan principal untouched.

Loan to value ratio (LVR)

The LVR refers to the size of your home loan expressed as a percentage of your property’s value. For example, if you borrow $300,000 to fund a property worth $375,000, the loan is said to have an LVR of 80% ($300,000 is 80% of $375,000).

Principal and Interest

A type of loan where each repayment is comprised of interest plus a reduction in the loan principal.

Private treaty

The sale of property subject to privately negotiated terms (as distinct from sale at auction).


Changing from a variable loan to a fixed rate loan. Can be useful if you are concerned about possible rate rises.

Variable rate

An interest rate that will vary in line with changes to interest rates.


A change to the home loan agreement.