Glossary A-B


Accrued Interest
This is interest on vacant land that is earned or incurred and yet to be paid or charged.

Additional Repayments
Extra or lump sum repayments made in addition to your regular periodic repayments. Some types of loan products do not allow you to make additional repayments, or place limits on the repayment amount.

On Business Loans – it relates to the process of apportioning expenses (e.g. cost of utilities, council rates) on day of settlement day that a seller has paid for but not used. The buyer has not used but should expect to be billed for this.

Application Fee
Fee charged by the lender to process your loan application. Some lenders may waive or reduce this fee for certain products. Also known as an establishment fee or approval fee.

There is an index known as the Housing Affordability Index. This is the ratio of average household disposable income to the income required to meet payments of a typical dwelling. The higher the number, the more affordable the property is.

This could be a person or an organisation which has the authority to act on a client’s behalf in the selling or purchase of a property.

This is a legal contract outlining terms and conditions of an agreement, loan, lease or any purchase agreement.

All in one Loan
This type of loan allows you to deposit all income into this account and then allows you to withdraw money. If spare funds stay in such an account longer, the interest savings are greater.

This is a plot of land that is created out of much larger area of land.

Amortisation Period
Sometimes called the loan term. It is the agreed length of time the borrower has to repay the loan and is agreed to at the time of application and approval.

Annual Percentage Rate
This is the advertised rate of interest per annum.

Appraised Value
This is the estimated value of a property that will be used as a security for a loan.

When you are overdue for a loan payment. When applying for a loan, the lender will want to know if you have ever been in arrears on your other loans.

Your assets are what you own. When applying for a loan, lenders will want to know about your assets such as real estate, bank accounts, shares, motor vehicles etc.

At Call
This type of account allows money to be withdrawn immediately.

Public sale of property with the highest bidder granted ownership. There is normally a reserve price set prior to the auction.

Balance Sheet
This is a statement outlining the financial status of a company. It shows the assets, liabilities, equities and so on for a company at a given time.

It is a legally declared inability or impairment of ability of an individual or organization to pay its creditors.

Basic Variable
A variable home loan where the interest rate is lower than standard products as it has “fewer frills”.

Bill of Sale
An agreement in writing in which ownership is transferred but the original owner is permitted to retain possession.

Body Corporate
A legal entity comprising of owners and strata managers to manage the building and all common areas.

Break Costs
Fees or penalties charged by a lender when a customer decides to end or “break” from a fixed interest rate before the end of the agreed fixed term.

Bridging Loan
A short term loan (often no longer than 12 months) designed to allow you to finance the purchase of a new property before you have sold your existing property.

Building Inspection
An inspection carried out prior to purchasing a property, generally by a qualified builder, to check for any defects or problems in the structure. The sale contract can be made subject to a building inspection, allowing the purchaser to pull out of the contract if problems are found, or negotiate a new price.

Building Society Institutions
Operating like Banks these institutions can provide loans, take deposits. Customers are termed members.