Real Estate Glossary (Australia)

Buyer-, seller-, and developer-relevant terms used in Australian residential real estate transactions.

0-9

100% Offset Account: A transaction account where the balance fully offsets the loan balance for interest calculations.

A

Agent (Real Estate Agent): A licensed professional engaged by the seller to market and sell a property.
Amortisation: The gradual repayment of a loan over time through scheduled payments.
Application Fee: A fee charged by a lender to process a loan application.
Auction: A public sale where a property is sold to the highest bidder under auction conditions (usually unconditional).

B

Basis Points (bps): One basis point equals 0.01%. Used to describe interest rate movements (e.g. 25 bps = 0.25%).
Body Corporate (Owners Corporation / Strata): The legal entity responsible for managing common property in strata-titled developments.
Bridging Finance: A short-term loan that helps you buy a new property before selling your existing one.
Building Approval (DA / CC): Council or private certifier approval required before construction begins.
Building and Construction Loan: A loan where funds are released in stages (progress payments) as construction milestones are completed.

C

Comparison Rate: A rate that includes the interest rate plus most fees, designed to help compare loan products.
Conditional Approval (Pre-Approval / Approval in Principle): An initial lender approval subject to conditions such as valuation, documentation, or final checks.
Contract for Sale: The legally binding document outlining the terms and conditions of the property transaction.
Conveyancer: A licensed professional who handles the legal transfer of property ownership.
Conveyancing: The legal process of transferring property ownership from seller to buyer.
Cooling-Off Period: A short period after exchange (typically 5 business days in NSW) where the buyer can withdraw, usually with a penalty.
Council Rates: Local government charges payable by the property owner.
Credit Limit (Facility Limit): The maximum amount you are approved to borrow under a loan or credit facility.
Credit Reference / Credit Report: A report from an authorised credit reporting agency showing your credit history. Lenders require your consent to access this.

D

Deposit: An upfront payment (commonly 5-10%) paid when contracts are exchanged.
Deposit Guarantee: A guarantee (often from another lender) used instead of a cash deposit in some transactions.
Developer: An individual or company that finances, constructs, and sells property developments.
Drawdown Date: The date loan funds are released to complete the purchase or pay a construction stage.
Due Diligence: The buyer's investigation of the property, including legal, financial, and physical checks.

E

Economic Costs (Break Costs): Fees charged when ending or changing a fixed-rate loan early, based on market interest movements.
Encumbrance: A legal claim or restriction on a property, such as a mortgage or easement.
Equity: The difference between your property's value and the amount you still owe on it.
Exchange of Contracts: The point at which signed contracts are swapped and the sale becomes legally binding.

F

Finance Approval: Confirmation from a lender that a buyer qualifies for a loan.
First Home Buyer Grant (FHBG): A government incentive available to eligible first-home buyers.
First Home Owner Grant (FHOG): A government grant available to eligible first-home buyers (conditions vary by state).
Fixed Interest Rate: An interest rate that stays the same for a set period.
Fixtures and Fittings: Items included (fixtures) or excluded (fittings) from the sale of a property.

G

Gazumping: When a seller accepts a higher offer after previously agreeing to sell to another buyer (before exchange).
Government Charges: Fees and taxes payable to government bodies, such as stamp duty and registration fees.
Gross Realisation Value (GRV): The total expected sales value of a completed development.
Guarantee: A legal promise by a third party to cover a borrower's debt if they default.
Guarantor: A person who provides a guarantee for part or all of a loan, usually using their own property.

H

Holding Deposit: A small payment made to show intent before exchange (not legally binding).
Home Loan: A loan used to purchase residential property, secured against the property.
Honeymoon Rate: A discounted interest rate offered for an introductory period.

I

Interest in Advance: Interest paid at the start of a loan period rather than at the end.
Interest in Arrears: Interest paid after it accrues, which is standard for most home loans.
Interest Only Repayments: Repayments that cover interest only, with no reduction to the loan principal.
Interest-Only Loan: A loan where repayments initially cover only interest, not principal.
Introductory Rate: A temporarily reduced interest rate at the start of a loan.
Investment Loans: Loans used to purchase property for rental income or capital growth.
Investment Property: Property purchased with the intention of generating rental income or capital growth.

J

Joint Tenants: A form of property ownership where all owners have equal shares and survivorship rights.

L

Land Title: The official record of property ownership.
Lender's Agreement (Facility Agreement): The formal contract outlining loan terms, conditions, and obligations.
Lenders Mortgage Insurance (LMI): Insurance protecting the lender (not the borrower) when the deposit is less than 20%.
Line of Credit: A flexible loan allowing you to borrow, repay, and re-borrow up to an approved limit.
Loan to Value Ratio (LVR): The loan amount divided by the property value, expressed as a percentage.
Lump Sum Payment: A one-off payment made in addition to regular loan repayments.

M

Market Value: The estimated price a property would sell for under normal market conditions.
Monthly Service Fee: An ongoing fee charged by the lender for managing the loan.
Mortgage: A legal agreement securing a loan against property.
Mortgage Broker: A licensed intermediary who helps borrowers compare and arrange home loans.
Mortgagee: The lender who provides the loan.
Mortgagor: The borrower who takes out the loan.

O

Off-the-Plan: Property purchased before construction is completed.
Option Agreement: A contract giving a buyer the right (but not obligation) to purchase within a set timeframe.

P

Portability: The ability to transfer an existing loan to a new property without refinancing.
Prepayment: Paying part or all of a loan before it is due.
Prepayment Fee: A fee charged for early loan repayment, often on fixed-rate loans.
Principal: The original amount borrowed, excluding interest.
Principal and Interest Repayments: Repayments that reduce both the loan balance and interest owed.
Private Treaty: A property sale negotiated directly between buyer and seller without auction.
Principal Place of Residence (PPOR): The home you primarily live in.
Property Value: The assessed market value of a property, usually determined by a valuation.

R

Rate Lock: An option allowing you to lock in an interest rate for a set period before settlement.
Redraw: The ability to withdraw extra repayments you've previously made on your loan.
Refinancing: Replacing an existing loan with a new loan, often to get better terms.
Rental Yield: Annual rental income expressed as a percentage of the property's value.
Repayment Holiday: An approved pause or reduction in repayments for a limited time.
Repayments: Regular payments made to reduce a loan balance.
Rezoning: A change in land-use rules by a planning authority.

S

Security: The property or asset used to secure a loan.
Settlement: The final stage of a property transaction where ownership officially transfers.
Split Loans: A loan divided into separate parts, often combining fixed and variable rates.
Stamp Duty: A state government tax payable on property purchases.
Strata Title: Ownership structure common to apartments and townhouses, including shared areas.

T

Tenancy Agreement: A legal contract between landlord and tenant outlining rental terms.
Term: The length of time over which a loan is repaid (e.g. 30 years).
Title Search: A legal search confirming ownership and any encumbrances on a property.

V

Vacant Possession: Property is delivered free of tenants and belongings at settlement.
Valuation: An independent assessment of a property's value, usually for lending purposes.
Variable Interest Rate: An interest rate that can change over time in line with market conditions.

W

Withholding Tax (Foreign Purchasers): Tax withheld from the sale price when the seller is a foreign resident.