Glossary E-H


Early Termination Charges
The costs a borrower pays when the loan is paid out early.

A right to use a corridor or passage of land that belongs to another.

End Loan
Also referred to as bridging finance. It is a short term loan that covers a financial gap between the purchase of a new property and the sale of an old property.

With regards to property, a borrower’s equity is the price the property could be sold for less any amount still owed on the mortgage. As the borrower pays off the loan principal, equity in the property will increase. Rising house values will also increase equity.

Equity Loan
A loan where you borrow against the value of your house (potentially up to 90% of the value of your house, less any outstanding loan amounts on the property), and the funds are then available for any personal use, similar to a personal loan but at a lower interest rate. Lenders will often also describe line of credit loans as equity loans.

Equity Mortgage
A loan secured by the part of the value of an asset (usually a house) owned by the borrower.

Establishment 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 application fee or approval fee.

Exchange of Contract
In law, it is the point in time when the buyer and the seller exchange documents and commence process with a view to settlement.

What you spend, including loan repayments, credit card repayments, rent, insurance etc. Lenders will need to know your monthly expenditure when you are applying for a loan.

Features (of a Loan)
Features of a loan and may include terms such as redraw facility, portability etc.

First Home Owners Grant
A Federal Government subsidy which first home owners may be eligible to receive. Also known as the FHOG. The funds received from the FHOG can be included in the settlement of your loan.

Foreign Investment Review Board

Financial Transactions Reports Act

Fixed Rate Loan
A loan where the interest rate is fixed for a set period, ranging from 1 to 15 years. This means your loan interest rate won’t fluctuate as it does with a variable loan. Generally, the longer you want to fix your loan, the higher the interest rate will be i.e. you may be able to fix your loan for 1 year at 6.5%, or for 5 years at 7.7%.

Complete ownership of a property and the land that it is built upon.

Ratio of money & funds borrowed in an investment. If property is highly geared then it has a high ratio of borrowed funds compared to ownership.

A person who guarantee’s to pay out a loan for you in the event you are not able to make the repayments yourself. A lender may require someone (i.e. a family member) to guarantee your loan if you would not be eligible for the loan in normal circumstances.

Holding Deposit
A refundable deposit based on the goodwill of the buyer to go ahead with the purchase.