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Finance Glossary

We like to make things simple!

Here are some commonly used terms in the finance industry that you may see from time to time.

Ballon Payments

A balloon payment is the lump sum payment that is attached to a loan, mortgage, or commercial loan. This payment is usually made towards the end of the loan period. A balloon payment is higher than what you might be paying towards the loan on a monthly basis.

Borrowing Capacity

Your borrowing capacity is the amount of money a lender will loan to you.

Early Exit Fees

Early exit fees are sometimes charged if you payout your loan in full within a certain period of time

Equity

The value of your property minus the amount you owe on your mortgage. Equity in your property can be used for a variety of purposes such as purchasing an investment property.

Genuine Savings

Demonstrated funds saved by a borrower over a period of time, traditionally three months. Lenders will generally require evidence of at least 5% or more of the purchase price saved.

Lenders Mortgage Insurance (LMI)

Lenders Mortgage Insurance is a one-off, non-refundable, non-transferrable premium that’s added to your home loan. It’s calculated based on the size of your deposit and how much you borrow. LMI protects the bank against any loss that they may incur if you are unable to repay your loan. It does not protect you.

Loan Interest

‘Interest’ is the fee the Lender charges you for the use of their money. The interest charge on your loan depends on the amount of money you borrow, the interest rate and the term of the loan.

Loan Amortisation

This term might sound scary but it’s just another way to describe the repayment of your debt. Over the term of the loan, your regular payments are said to ‘amortise’ the loan.

Loan Repayments

‘Loan Repayments’ refers to the regular payments you make over the term of your loan. These are typically monthly and generally cover the interest charge and a portion of the principal.

Loan Term

‘Term’ is the agreed period you have to repay your loan. For some loans, this could be a year or less, while for most home loans it is between 25-30 years.

Loan Value Ratio (LVR)

The amount which is borrowed from the lender compared to the value of the property being purchased. For example, if you borrow $480,000 to buy a property valued at $600,000, your LVR is 80%.

Principal

‘Principal’ is the amount of money you borrow from a Lender when you take out a home loan, mortgage or other finance.

Refinance

Replacing of an existing loan with a new loan, usually with a new lender, that has a lower interest rate or improved product features that will ultimately reduce repayments or length of the loan.

Settlement

The process of a property title being transferred from a seller (vendor) to a buyer once the balance of the purchase price is paid. This is the date when interest starts to be calculated and home loan repayments begin.

Why Choose Inovayt

Simple

Finding the right financing to match your needs and goals is never an easy task. Our team prides themselves on finding the right solution for each client, regardless of their personal situation.

Flexible

Our brokers work hand in hand with our clients, to ensure they receive the best possible outcome. We are available to chat face to face, online, or via phone, at a time that suits you.

Solutions-driven

Our focus is always about achieve the best possible outcomes for our clients. We will tackle any hurdles that may come up, to ensure that you are satisfied and have achieved your desired outcome.

Simple

Finding the right financing to match your needs and goals is never an easy task. Our team prides themselves on finding the right solution for each client, regardless of their personal situation.

Flexible

Our brokers work hand in hand with our clients, to ensure they receive the best possible outcome. We are available to chat face to face, online, or via phone, at a time that suits you.

Solutions-driven

Our focus is always about achieve the best possible outcomes for our clients. We will tackle any hurdles that may come up, to ensure that you are satisfied and have achieved your desired outcome.

Start your journey, contact Inovayt today

Start your journey, contact Inovayt today

Start your journey, contact Inovayt today

Start your journey, contact Inovayt today