Finance Jargon - What should I know?

Each lender these days has their own jargon for their products and what they can do for you. I would suggest the following key jargon are essential when navigating the banks for a home loan or investment loan:

 

Standard Variable Rate

 

This is their variable rate prior to any discount – no-one should be paying this in today’s market unless there is a discount applied. Also note that most lenders have a different Standard Variable Rate for their owner occupied loans and their investment loans!

 

Basic Variable Rate

 

This is the no-frills loan often suited to first home buyers – often it should have limited fees and limited add-ons (such as an offset account) which may not be needed).

 

Offset Account

 

A transaction account which is linked to your home loan, but offsets the interest payable by how much is in the offset account. It is useful to have your salary placed in this.

 

Professional Package 

 

Generally has an annual fee of approx. $400 but allows for multiple loans and flexibility to change them as required (without additional fees). 

 

Fixed Rate

 

A fixed interest rate which can change even after you have signed you loan documents unless you have opted for a rate lock (often incurring a fee) – note that should you discharge you loan prior to the fixed rate term finishing a ‘break fee’ may be payable.

 

 

David Lipschitz, Logic Finance

 

 

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While every care has been taken to ensure the accuracy of the displayed information, the publisher gives no warranty and make no representation as to the accuracy or sufficiency of any displayed description, photography, illustration or statement because all this information may be subject to change. Readers should make their own enquiries and satisfy themselves as to whether the information provided is current and should seek advice before entering into any contract. Photographs and illustrations displayed are indicative only and may not depict the final product.

Angus Estate, Monopoly Property Group

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Disclaimer: While every care has been taken to ensure the accuracy of the displayed information, the publisher gives no warranty and take no representation as to the accuracy or sufficiency of any displayed description, photography, illustration or statement because all this information may be subject to change. Readers should make their own enquiries and satisfy themselves as to whether the information provided is current and should seek advice before entering into any contract. Photographs and illustrations displayed are indicative only and may not depict the final product. RLA 272857