Glossary

Also known as the “True Rate”, is used as a tool to assess the average interest payable on a mortgage over a seven-year period. Also includes upfront fees, ongoing fees, and the interest payable on that mortgage over the seven years.

Australian Bankers Association. The ABA is the national organisation of licensed banks of Australia.

The option to make higher repayments to pay off the loan faster.

To agree to the terms of an offer or contract.

This facility allows you to make greater payments than specified on a loan.

Many banks/lenders charge one off and, in some cases, ongoing account keeping fees for mortgages.

The amount of loan interest that has already occurred but not yet due for payment.

The process of allocating expenses (Council, rates, water rates) on settlement day that the seller has paid for but not used. When a property is sold, the vendor (seller) is normally entitled to all income (eg. rent) and is responsible for all expenses (eg. council rates, water rates, etc) up until the date of settlement, which normally takes place four to eight weeks after the exchange of contracts. Settlement is the day on which you finalise payment and take possession of the property. The purchaser, meanwhile, is entitled to all income and is responsible for all expenses from the date of settlement onwards. Therefore, prior to settlement, the balance of the purchase price of the property needs to be ‘adjusted’ to allow for expenses that have been paid in advance or will be owing at the date of settlement.

A person or body authorised to act on behalf of a client in the sale, purchase or management of property.

All-in-one loans are usually variable and enable you to deposit all your income into the loan account. You are then able to draw on that money for day-to-day expenses. The purpose of this is to reduce the interest payable because the excess spare funds act as payments.

The block of land created out of a larger area.

This is the term or length of time of the loan as agreed upon.

Strict laws now apply to the process of identifying individuals who wish to apply for a home loan. The act also provides for triggers that must be reported where an individual displays suspicious behaviour in relation to the source of their funds.

An added cost associated with submitting an application for a new loan, get additional funds, or when changing your loan. Also referred to as an establishment fee by some lenders. The fees are sometimes required to be paid upfront and are not usually refundable unless the loan is refused.

Also referred to as a Comparison rate, the Average Annualised Percentage Rate reflects the total cost of your loan by taking into account other costs other than the advertised interest rate. This is then expressed as a total interest rate cost to you over an average loan term.

The Australian Financial Complaints Authority or AFCA is an external dispute resolution scheme for consumers who are unable to resolve complaints with member financial services organisations.

The Australian Prudential Regulation Authority (APRA) is an independent statutory authority that supervises institutions across banking, insurance and superannuation and promotes financial system stability in Australia.

A written report of the estimated value of a property. A qualified appraiser, usually employed by the bank/lender, conducts the valuation.

The estimate of the value of a property being used as security for a loan.

This is an increase in the value of a property as a result of inflation and market conditions.

The Australian Securities & Investment Commission administers the NCCP legislation – within this they appoint licenses and register credit representatives. They also have an active auditing role to ensure that all participants are complying with the Act.

An asset is anything you own that is worth money, including any savings, stocks or funds.

Automatic Teller Machine

Being overdue in a loan repayment

The formal term for a standard principal and interest loan

The period of time one has to repay a loan at the arranged terms.

A public sale of property with ownership going to the highest bidder, subject to a reserve price being reached.

A statement of assets, liabilities and net equity for an enterprise at a point of time.

A large loan repayment, typically towards the end of the loan term, to clear a debt.

A cheque that is issued by a bank, drawn on itself.

When a debtor who, cannot pay their debts, have their financial affairs managed by a trustee in bankruptcy.

Generally, tend to be cheaper than variable loans, however these loans tend to be less flexible and offer fewer features, such as redraw facilities or no extra payments can be made.

A person presenting a cheque to a bank for payment.

The beneficiary is the person that is selected to receive the income from a trust, estate, or a deed of trust.

The Best Interests Duty for mortgage brokers officially came into effect on 1 January 2021

The best interests duty for mortgage brokers is a statutory obligation for mortgage brokers to act in the best interests of consumers (best interests duty), and to prioritise consumers’ interest when providing credit assistance (conflict priority rule).

These two obligations are collectively referred to as the Best Interests Duty.

Based on the Royal Commission’s recommendations, it aims to align “consumers’ expectation and interest with that of the interest of the mortgage broker.

A representative body for and on behalf of the owners, to administer, control, maintain and manage all areas of the common property for the strata scheme.

To break the conditions of a contract which have previously been agreed to.

If you have a fixed rate loan contract and you wish to break the contract before the period expires, you may incur a break fee.

An entity or person/s borrowing money.

This type of finance is used for times when finance is needed to buy a new house while waiting for the old one to sell and usually has higher interest rates.

A detailed review of your income and expenses.

It is encouraged to carry out a building inspection prior to purchasing a house to make sure the house is structurally sound.

Insurance which covers the cost of rebuilding or repairing a property following structural damage, for example by flood, fire, storm and subsidence.

The standards formulated by local councils to control the quality of buildings.

Refers to the financial gain obtained when you sell something for more than you paid for it. Usually, the profit you receive from selling the asset incurs capital gains tax, except on the sale of a home that remains exempt from this tax.

A federal tax on the monetary gain made on the sale of an asset (excluding your own residence) bought and sold after September 1985.

The difference between the price you pay for an asset and the price you receive when you sell it or the valuation placed on that asset.

A loan where the interest rate is not allowed to exceed a set level for a period of time, but unlike fixed rate loans, is allowed to drop.

A loan on a personal line of credit, typically a credit card attracting higher than normal interest.

In relation to company accounts, reported net income plus amounts charged off for depreciation, amortisation and extraordinary charges to reserves.

Is Latin for beware and is a warning on a property’s title that stipulates that a third party has some rights or interest in the property.

Let the buyer beware’ – the principle that puts the onus on buyers to be satisfied with any item before buying.

A document that is issued by the federal government confirming a veteran’s eligibility for a Department of Veteran Affairs mortgage.

A statement that identifies who owns the land and includes details of mortgages, easements, dimensions of the land and whether there are any obstructions on it.

Refers to personal property. There are two types of chattels; real chattels which are buildings and fixtures, personal chattels which are clothing and furniture.

The business owns the asset from the start. Chattel mortgages require regular ongoing payments and typically provide the option of reducing the payments through the use of a final 'balloon' payment.

A group of houses or villas that share common space.

This is exactly as it sounds. It is a combination of the several of loans on offer and may have a portion variable, fixed or a line of credit.

Property intended for use or occupancy by retail and wholesale businesses (e.g. stores, office buildings, hotels and service establishments).

A fee payable to a real estate agent, by the vendor, for the sale of property, or by a lender or client to a third party, such as a broker, for arranging a loan.

An area used by many, not an individual. Owned by the Owners’ Corporation.

A type of ownership for a unit/flat/apartment in a building that is owned by a company. A purchaser buys particular shares in the company which gives the purchaser the right to occupy a specific unit/flat/apartment. Lenders are generally not enthusiastic about lending on company title properties.

A Comparison Rate reveals the cost of a loan, allowing you to compare ‘apples with apples’ when choosing a loan. The Comparison Rate takes into consideration the costs associated with setting up a loan including the interest rate, the loan approval fee and any other up-front or ongoing fees. It excludes government fees and charges, because they are standard across all loans.

Interest that is paid on both the accumulated interest as well as on the original principal.

If you are building a property, a construction loan allows you to draw money as required to assist with building costs.

Is an Act of Parliament that governs the involvement between borrowers and lenders. Credit providers such as banks, building societies etc, must tell you what your rights and obligations are in any credit arrangement. They are required by law to truthfully disclose all relevant information about your arrangement in a written contract, including interest rates, fees, commissions and other information which in the past was often hidden.

A policy insuring household contents against theft and damage.

A legally enforceable agreement between individuals or entities. In real estate, a contract is entered into when contracts are exchanged and the deposit is paid.

This is a written statement that is legally binding and outlines the terms and conditions of the sale of property between purchaser and seller.

Any variation or alteration to the terms of a contract.

A person qualified and licensed to handle all documentation for the sale and or purchase of a property.

The legal process for transferring a real estate ownership from one owner to another. This can be a costly process and is applicable to all States with the exception of South Australia where a Torrens Title is used instead.

A 'cooling-off period' may also apply after contracts are exchanged. This refers to the period of time during which the purchaser may cancel the contract, although they will lose a portion of their deposit. The cooling-off period is not available for properties purchased at auction and is not available in all states, so check with your legal adviser.

The Credit Ombudsman Service Limited

Additional signature or signatures to verify the authority of the person signing.

Terms and conditions that specify the usage of a block of land or the buildings on it.

A note of temporary property insurance before the implementation of a formal policy.

An agreement whereby the borrower receives foods or money now, on the understanding it is to be repaid under set guidelines that commonly include an interest charge.

A report ordered by a lender on receipt of your loan application from one of the two main Australian credit reference agencies. This report shows previous loan applications and judgments for the past 5 years. Too many credit inquiries over the past two years can be a common cause for an application being rejected.

A person or organisation who loans money on the expectation it is to be repaid.

A report detailing an individual's or business' past credit arrangements. A credit history is often sought by a lender when assessing a loan application.

The maximum amount a borrower can use at any one time.

A ranking applied to a person or business based on their credit history that represents their ability to repay a debt.

A report outlining an individual’s credit history, public records and any credit black spots.

Interest calculated on a daily basis. Most variable rate loans calculate interest on a daily basis.

An account entry to charge a withdrawal to a specified account.

A bank access card used to make withdrawals from current funds in a bank account.

An amount of money owed by one person or organisation to another.

Someone who owes money to someone else.

To combine one or more debts previously held separately into one merged amount.

The Debt Servicing Ratio measure whether you can afford the mortgage payments. To calculate the DSR, the lender uses a number of factors to work out the amount of your income that is available to repay the debt.

A legal document stating an agreement or obligation regarding a property.

Failure to make a loan repayment by a specified time.

Is a fee that is charged when you pay out your loan within a short period of time, usually up to four years.

An agreement between two parties where the amount due to be paid on a given date may be postponed until a later date.

Amount given in advance to show intention to purchase a property.

Banks and lenders provide deposit bonds as a guarantee that the full payment will be made by the due date. Deposit bonds are used when cash is not readily available for the deposit.

A decline in the value of a property or an asset.

A system where funds are electronically debited from your nominated bank/building society account.

The various costs your solicitor or conveyancer has to pay to other organisations and bodies on your behalf, for example, search fees and stamp duty/ land tax. Your solicitor or conveyancer will itemise the disbursements on the invoice they send you.

This is a fee that is charged when closing a loan account.

Any income that is left over after all expenses and bills have been paid.

This provides access to available loan funds and usually refers to lines of credit.

If a loan is repaid before the end of its term, lenders may charge an early repayment penalty.

A right to use a part of land that is owned by someone else.

Electronic Funds Transfer. The electronic transfer of funds from one account to another.

An outstanding charge on a property.

To sign the back of a cheque to confirm or transfer its ownership to someone else.

Is the percentage, or the amount, of your home that you actually own. Equity increases as the mortgage decreases and equity is affected by market values and also home improvements.

A loan that uses the equity in your property to borrow for any personal purpose, including personal investment. It usually operates like an overdraft, where the borrower has a set credit limit to which they can draw funds. The term Equity loan can also refer to a Line of Credit loan.

An escrow account is set up by your mortgage lender to pay certain property-related expenses, like property taxes and homeowner’s insurance. A portion of your monthly payment goes into the account. If your mortgage doesn’t have an escrow account, you pay the property-related expenses directly.

This is a fee that is paid to the bank/lender at the point of setting up the loan. Also known as Application Fee.

This occurs when the vendor and buyer give each other the necessary legal documents (usually occurs via solicitor or conveyancer) and commence the settlement process.

These fees are incurred when a loan is paid off earlier than the agreed upon term and this fee usually applies to fixed interest rate loans.

Finance Brokers Association of Australia. The Finance Brokers Association of Australia (FBAA) is the nation’s leading broker association for finance and mortgage professionals. We represent, educate and support more than 8500 brokers across the country.

The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation. Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria.

These are items that can be removed without causing damage to a property. Fittings which will remain in the property must be specified in the contract for sale.

This applies to mortgages where the interest rate is fixed and is not affected by inflation, or deflation, and is for an agreed period of time. Most fixed rate loans can be taken out over a 1, 2, 3, 4, 5, 7, or 10-year period and the interest rate offered to you at the time of applying for the loan will remain ‘fixed’.

When a Lender lends you money at a fixed interest rate, they do so on the understanding that you will make certain fixed payments for the whole of the fixed rate period. Usually, the Lender arranges their own funding position on the assumption that they will receive those payments. As a result, if you make certain changes to your loan, it will change that funding position. The Lender may make a loss from re-arranging their funding. As a result, you may be required to pay costs for breaking the fixed rate period depending on the circumstances.

These are items that are likely to cause damage to a property if removed. It pays to check what the sale contract specifies.

The form of property ownership where the property and the land it stands on fully belong to the owner.

An account in which all transactions have been suspended.

To legally divert a part or whole of someone's money or property to someone else by order of a Court, usually to settle a debt.

Many buyers have been extremely frustrated with a practice known as gazumping. This is when the seller verbally agrees on a price for a property but then later advises you that someone else wants to buy the home and has offered more money. In some occasions you are given the chance to match or better the increased offer. In most cases, the home is sold for the increased price without you even knowing about it.

Investment property is negatively geared when expenses exceed rental income. Investment property is positively geared when the rental income received is greater than the total amount of the expenses.

Funds that have been accumulated or held for a certain period of time prior to applying for a loan.

All home loans and purchase of residential property will attract certain government charges at the time of settlement. For example, stamp duty and mortgage duty.

The total money earned by a business before expenses are deducted.

(also known as net sales) the difference between sales and the direct cost of making the sales.

Goods and Services Tax which is a federal tax levied as a percentage added to the price charged on specified goods and services.

A promise made as bound by the terms of a contract.

This is when someone agrees to be responsible for the payment of another person’s debts should they default on their repayments.

It may be possible to change the terms of the loan, based on financial hardship.

A type of finance contract where a good is purchased through an initial deposit and then rented while the good is paid off in instalments plus interest charges. Once the good is fully paid the ownership of the good transfers to the purchaser.

A refundable deposit demonstrating the goodwill of the buyer to proceed with the purchase.

This is a loan that assesses the amount of home equity you have and based on that, offers a line of credit that can be used to invest in a property or to renovate for example. These loans are not suitable for everyone, so talk to your mortgage consultant.

A way of referring to both buildings and contents insurance.

Also known as ‘Introductory Rate’, this is when lenders offer a very cheap interest rate, usually for a one-year period.

Items included with a property e.g. light fittings, stove, etc which must be specified in the contract of sale.

A statement of income and expenditure for a period, usually a year.

This is what lenders charge you for the use of their money.

A loan where the borrower elects to make monthly repayments of interest and no principal reductions. The interest only period is limited to between 5 to 10 years depending on the product option selected by the customer and approved by the lender. More interest is paid over the term of the loan with an interest only loan. At the end of the interest only period, repayments will change to principal and interest for the remainder of the loan term.

The rate at which interest is applied.

A measure of the return on an investment (or loan) which takes into account the time value of money by showing the rate of interest at which the present value of future cash flows is equal to the cost of the investment or loan.

See our glossary item ‘Honeymoon Rate’. A reduced interest rate offered for a specified period of a loan, usually the first twelve months.

A list of items included with a property e.g. furniture, moveable items etc.

An asset purchased for the purpose of earning money such as shares or property.

The owner does not live in an investment property and the property is purchased simply for earning a return on the investment, which can be in the form of capital gain or rent.

This is when there are two or more purchasers to the one property and each purchaser owns an equal share in the property. Upon the death of one owner, their share automatically is transferred to the remaining owners.

A State Government tax charged to the owners of any property based on a stipulated value of the land, other than a principal place of residence. Land Tax is not applicable in the Northern Territory.

An agreement between two parties under which one (the lessee) is granted the right to use the property of another (the lessor) for a specified period under specific terms and conditions.

May be incurred in the case of an outside party being used to prepare bank documentation typically $250 per mortgage – some lenders absorb this cost.

A person or organisation who provides money to another under the proviso that it will be repaid according to set guidelines and terms.

Lender’s Mortgage Insurance is a once off insurance premium that protects the lender in the event you default on your mortgage repayments.

A person’s debt or financial obligations, including existing credit card debts and personal loans.

The right to hold property as security against a debt or loan.

Line of Credit also known as an equity home loan, is when the lender assigns you a credit limit secured against your property, and when you need cash you draw against that limit, usually by writing a cheque or using a special debit card. As you pay back the loan (the terms of repayment vary), the money becomes available to you to use again.

Are assets, either in cash or easily convertible to cash.

The loan is approved before the borrower bids on or offers for the property and is dependent on the borrowers satisfying the Lender’s lending criteria in principle. It is also subject to a satisfactory valuation.

Stamp duty on loan security documentation.

Period over which a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term.

This is a tool used to measure the strength of a loan. The value of the loan divided by the value of the property that the loan is for (Mortgage/Property Price X 100 = LVR)

Example: if you buy a $500,000 property and need a $350,000 loan – your LVR is 70%.

Loans available to applicants who may not have up to date or complete financial information available at the time of application.

An interest rate that includes both the headline interest rate and the fees and charges relating to a loan. It is designed to help consumers identify the true cost of a loan and compare it with other similar loans.

This is the date by which the loan must be paid in full.

The maximum loan to valuation ratio. This means the amount you can borrow expressed as a percentage of the valuation of the security (usually the property you are buying). For example, 90% LVR means you can borrow up to 90% of the valuation of the property.

After assessing your disposable income, deposit and the purchase price of a property, you will be advised of the maximum amount you can borrow.

This is the least amount you are required to pay each month on your loan.

The fees charged to cover or partially cover the lender's internal costs of administering the loan each month.

A loan for the purpose of purchasing a property, where the property is used as security.

A form of security for a loan usually taken over real estate. The lender, the mortgagee, has the right to take the real estate if the borrower, the mortgagor, defaults on the loan repayments. A mortgage over land is registered or noted on the Certificate of Title to that land.

The lending institution.

The borrower.

Where the lender forces the sale of the property held under the deed of mortgage in order to recoup unpaid monies owed under the terms of the agreement.

If you are borrowing more than 80% of the property value the bank/lender will most likely request that mortgage insurance is taken out. It is important to note that this form of insurance protects the lender and not you, the borrower.

This is a savings account that runs in conjunction with a home loan where the interest earned on that account is applied to the interest that is paid on the loan. By doing this, you are depositing extra money on to the mortgage, which you can access when needed, and reduce the interest that is charged on your mortgage.

Also know an income protection insurance, this insurance is often recommended as it covers you if you are unable to meet repayments due to serious illness or redundancy.

State government tax calculated on the borrower's loan amount.

The length of time over which you agree to pay back your mortgage, usually up to a maximum of 30 years.

Australian legislation covering consumer protection and consumer rights.

Legislation that came into full effect on the 1st January 2011 – removing all previous state based regulations and licenses. The new act covers the licencing of all lenders and mortgage brokers in Australia and is administered by ASIC.

Where the income from an investment property is insufficient to meet the interest costs of the loan used to fund the investment property.

The term ‘gearing’ refers to borrowing money for investment purposes, using existing assets as security for the loan. Gearing can be positive, neutral or negative, and it’s this last one that is most common when it comes to property investment. Negative gearing occurs when the costs of borrowing to purchase an investment property exceed the income you receive from your investment. So, if your interest costs on the investment loan amounted to $25,000 p.a. and the rental return was $20,000 p.a. you would be negatively geared to the tune of $5,000 p.a.

Designed for those who find it more difficult to meet the borrowing conditions of standard loans.

Notice given either by a landlord or tenant that they want to end the rental agreement and vacate the property in compliance with the terms and conditions of the lease.

When you buy a property from the plans only and not the finished building. The purchaser will not be able to inspect the property or see the standard of finishes, the practical layout, the size and dimensions or the outlook. However, the purchaser may be able to view a display unit and sample finishes.

Usually, a written contract setting out the terms under which the buyer agrees to buy. If accepted by the seller, it forms a legally binding contract subject to the terms and conditions stated in the document.

An offset account is an account linked to your mortgage. The balance in the account ‘offsets’ the principal of the loan. Overall interest is calculated on the principal less the offset account balance.

Independent body established within a particular industry to investigate and resolve disputes as an outside party to the dispute.

A legally binding document which gives a person, for a fee, the right to buy something, usually within a specific time frame at a specific price and subject to specific conditions.

The expenses incurred in generating income – typically rates, insurance, repairs and maintenance and management fees.

This occurs when you spend more money on your home than you are likely to get back if you sell the property.

An arrangement on a cheque or savings account under which a bank extends credit up to a maximum amount (the overdraft limit) and against which the customer can make withdrawals. Interest is charged on the fluctuating daily balance.

A representative body for and on behalf of the owners, to administer, control, maintain and manage all areas of the common property for the strata scheme.

Property that is lived in by its owners.

The option to reduce your regular principal and interest repayments by up to half, in the event of a loss of income due to maternity/parental leave.

A property is 'passed in' at auction if the highest bid fails to meet the reserve price set by the vendor.

Abbreviation for Pay-As-You-Earn, a taxation procedure for wage and salary earners under which income tax is deducted in instalments from periodic pay.

The person or entity to which a cheque is payable.

The detailed illustration of a house that shows the internal layout and dimensions and the position of the house on the land.

This option allows you to keep your existing home loan if you move house, without having to refinance.

A payment made before the due date of the loan or in addition to the minimum repayment. This can sometimes incur a penalty fee so be sure to check the terms and conditions of the loan.

This is the capital sum borrowed.

This is a loan where both the interest and the principal is to be repaid.

This is when you recalculate the minimum repayments and is usually done if the loan amount has changed significantly.

This feature allows you to make extra payments on your mortgage and then borrow from that money if needed. Redrawing may extend the life of the loan and increase your repayments.

A redraw fee may be charged to cover or partially cover the lender's internal costs of allowing the borrower to redraw funds.

Occurs when you replace or extend an existing mortgage by arranging for a new mortgage, with the same or different lender.

Your initial loan is paid out and your debt is transferred across to the new product or lender.

A periodic review of rent under a lease using a predetermined method. It may be in line with the Consumer Price Index (CPI) or in accordance with a market valuation.

A repayment holiday is when you’ve built up enough buffer with your funds (available redraw) from making extra repayments on your home loan. This buffer allows you to stop or reduce the amount of loan repayments as available redraw covers your scheduled home loan payments. You should contact your lender to check that your available redraw will cover the payment you wish to miss or reduce.

To reclaim possession of goods or assets for failure to make payments within agreed terms.

Requisitions are questions asked by the buyer of the seller about the title and statutory obligations and controls affecting the property. The right to make requisitions is created by the contract and the seller must answer the requisitions accurately and in a reasonable time.

Is the body that is responsible for the maintenance of Australia’s financial system, and for setting the official short-term interest rates on which many variable-rate home loans are based.

This is the minimum price a seller is willing to accept at an auction.

Specialist bodies that exist in most Australian States and Territories to resolve disputes between landlords and residential tenants.

Used by real estate agents to identify tenants with a history of breaching tenancy rules.

A right of way is a particular type of easement i.e. a right to travel over land belonging to another person in a particular manner. It does not give a right to take any produce or soil from that other person’s land.

A building contract clause that allows the final pricing to move up or down according to the fluctuations of material prices or wages or variations to building work.

Research that is undertaken by solicitors to confirm information about the property or the purchaser, prior to settlement.

In this type of loan, the property being purchased is held as security against the loan.

An asset that guarantees the lender their loan until the loan is repaid in full. Usually, the property is offered to secure the loan.

Usually, the property offered as security for the loan.

Also called a Duplex. This is a type of construction where two buildings are attached together by a common wall or walls.

A borrower’s ability to make repayments (service) on the loan when payments are due.

The date where the balance of the contract price is paid, and the property officially becomes the buyers.

A person authorised to access an account or who has authority to sign and be bound by documents.

The loan is split into two (or more) accounts. Customers sometimes use this option to take part of their loan at a fixed interest rate and part of their loan at a variable interest rate giving them rate certainty on the fixed rate portion and flexibility on the variable rate portion.

A variable loan that has extensive features, which is unlike a basic variable.

This State Government tax is paid by the purchaser and is calculated as a percentage of the purchase price.

Strata title has enabled the subdivision of land and buildings into lots and common property. The “lots” are the units or other areas owned by owners. Apart from the unit there can be areas like laundries, car spaces, garages and marinas which form part of the lot. The common property is everything that does not form part of a lot and is owned by the owner’s corporation (all the owners collectively).

Similar to Company Title. As the owner you become a shareholder in the company that manages the common area, not just a member as in Strata title. Stratum units are regarded as unattractive because of difficulties and complexities involving the operation of the company, Corporations Law obligations and a reluctance on the part of lenders to accept them as security.

A plan that shows the boundaries and the building position on a block of land.

Two or more purchasers owning the one property in any share proportion they choose. When a tenant in common dies, their share in the property passes in accordance with their will. Unlike joint tenants where the share passes to the other owners or joint tenants.

Also known as the life of the loan and refers to the length of time for which the loan is to be repaid.

This legal document advises of ownership of a property.

Torrens Title is the most common form of property title in Australia. All previous and current owners are listed on the one deed, as are all previous mortgagees etc. Also known as “RPA” standing for “Real Property Act”, the legislation that governs the operation of Torrens Title.

A type of dwelling which shares at least one common wall with neighbouring dwellings – usually a two storey dwelling registered under a strata title.

This document confirms a property’s change of ownership with the Land Titles Office.

This is a property that has no outstanding charges, liabilities or restrictions on it.

A loan in which no property is held as security, generally attracting a higher rate of interest due to increased risk on the part of the lender.

A report undertaken by a registered valuer that stipulates the value of a property. Often there is a fee that the bank/lender may charge for this service.

This is a rate that increases or decreases depending on money market interest rates.

This term refers to any changes made in a loan contract.

The party that is selling the property.

A statement by the seller to the buyer detailing material particulars regarding the property in question.

A single storey, attached dwelling.

Income that is earned from a property that is typically expressed as a percentage of the value of the investment.

This is a statutory explanation that provides an account of the uses of a property as determined by local council and planning authorities.