Jargon Busting Terminology and Explanations

Home Loans of Oz is a trading name of Connect2Loans Pty Ltd (ACCN .

We are a privately owned Australian company founded for the purpose of providing competitive online home loans. We provide fast, convenient, and competitive online home loans that are easy to understand, live with and pay off. We partner with wholesale funders to provide you with a competitive home loan.

We are not the lender nor are we a mortgage broker; we liaise with the lender and manage your ongoing relationship with them during the loan application and on an ongoing basis after your loan settles.

There are no exit fees or penalties on your home loan. If you have chosen a fixed rate loan and you wish to refinance it before the end of the agreed fixed term, there may be a break fee. This will be calculated on the basis of how many months your fixed term loan still had to run to expiry and the loss (if any) of income our funder will incur by accepting repayment of your loan and relending those funds to another borrower.

Your loan term can be for a maximum period of up to 30 years.

You may request a shorter loan term, or our funder may propose a shorter term, depending on your circumstances. The most common situation which may require a shorter loan term will be if a 30 year loan term exceeds your expected term of employment.

The minimum deposit (or equity) you will need is 10% of the property’s valuation.

Your risk rated interest rate will increase as your equity (deposit) in your home or investment property decreases. The more equity (or deposit) you have, the lower your interest rate.

LMI is an insurance policy that protects the lender, not you. It is often a requirement of lenders when you borrow more than 80% of a property’s valuation. The LMI premium is a once off, generally non-refundable, cost passed onto you by the lender. It protects the lender from borrower default but does not remove your obligation to repay the loan.

The Loan to Value Ratio (LVR) is the amount of the loan compared to the property value expressed as a percentage.

For example, buying a $500,000 property with a 10% deposit ($50,000) means your LVR is 90%  (450,000/500,000)

Your property’s valuation for lending purposes will generally be the sale contract purchase price. However in suburbs where property prices fall or rise quickly, the statistical valuation can be less accurate, and we may request a formal valuation.

A variable interest rate reflects the cost of funding (and the lender’s margin) at the time you took out your loan and any subsequent changes, including but not limited to changes in the Official Cash Rate as set by the Reserve Bank of Australia. Variable interest rates can increase and decrease over the term of your loan.

Fixed interest rates are set for an agreed period (usually 1 to 5 years) at the time your loan settles or should you subsequently choose to fix your interest rate. The advantage of a fixed rate is that you know for the agreed term exactly what you repayments will be each week, fortnight or month, and your interest rate will not increase if there is a change in variable rates. Conversely your fixed rate will not fall if there is a drop in variable interest rates during your fixed term.

A split loan allows you to fix a portion of your loan whilst the balance remains on a variable interest rate. This is popular with people who want some certainty of repayments and an opportunity to repay the variable portion of their loan off faster.

An Offset account is a deposit account that is linked to your loan for the purposes of calculating interest on your home or investment property loan. In effect the interest payable on your loan is reduced by some or all of the interest earned on funds in your Offset account, but your loan balance is not reduced by the funds on deposit, and you are free to add or reduce to you Offset account balance.

A Redraw facility on your home or investment property loan allows you to pay down your loan and subsequently redraw some or all of the accelerated loan repayments.

Comparison rates are calculated on a loan amount of $150,000 for a term of 25 years. These rates are for secured lending only. Comparison rates for variable interest only loans are based on an initial 5-year interest only period.

WARNING: The comparison rates are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Lending criteria, fees, terms and conditions apply.

Home Loans of Oz takes technical and organizational security measures to protect your personal information provided via the services from loss, misuse, and unauthorized access, disclosure, alteration, or destruction. However, no Internet or email transmission is ever fully secure or error free. Please keep this in mind when disclosing any information to Home Loans of Oz via the Internet.

Please read our Privacy Policy for more information.

Compliance and Privacy

Connect2Loans Pty Ltd is a Corporate Credit Representative of The Local Loan Company Pty Ltd ACL 493877.

Our Privacy Policy is available here, your personal information is important, and we will maintain the confidentiality and security of such.

There are specified third parties we will need to share your information with, these include credit reporting agencies, funders, lenders mortgage insurance providers and our chosen lender partner. 

Should you have a complaint in relation to our service or processes, please contact our Complaints Officer (complaints@homeloansaustralia.com.au) in the first instance to discuss and, where possible, resolve your complaint.

If we are unable to resolve your complaint you can request the assistance of the Australian Financial Complaints Authority (AFCA).

The information on this website has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information and, if necessary, seek appropriate professional advice. This includes any tax consequences arising from any promotions for investors and customers should seek independent advice on any taxation matters.

Marketing Consultant Expert
Ray Hair

Home Loan Expert

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