The vocabulary of buying property in Australia was not designed to be welcoming. Here it is, translated.
LVR, or loan-to-value ratio
Your loan as a percentage of the property's value. An $800,000 property with a $640,000 loan is an 80% LVR. This single number determines whether you pay LMI and often what interest rate you are offered.
LMI, or Lenders Mortgage Insurance
Insurance protecting the lender if you default, required above 80% LVR, paid by you. Not to be confused with mortgage protection insurance, which protects you and is a different product entirely.
Genuine savings
Money you have accumulated and held, usually for at least three months, as opposed to a gift or a windfall. Lenders want evidence of the habit, not just the balance.
Pre-approval, or conditional approval
A lender's indication of what they would lend, subject to conditions and a valuation. Useful for knowing your range and for bidding with confidence. It is not a guarantee, it typically lasts three to six months, and it is not the same as unconditional approval.
Private treaty and auction
Two ways property is sold here. Private treaty means a listed price and negotiation, and usually comes with a cooling off period. Auction is unconditional. If you win, you sign and pay the deposit that day, with no cooling off and no finance clause. Never bid at auction without unconditional finance and a completed inspection.
Cooling off period
A short window after signing a private treaty contract during which you can withdraw, usually forfeiting a small percentage of the price. The length varies by state and it does not apply to auctions. Check your state's rules specifically, as they differ meaningfully.
Section 32, or vendor statement
The Victorian name for the disclosure document a seller must provide before you sign, covering title, easements, rates, and known defects. Other states have equivalents under different names. Your conveyancer reads this properly. So should you.
Conveyancer
The professional who handles the legal transfer. A solicitor can do the same work and is worth the extra for anything complicated. Engage one before you sign anything, not after.
Settlement
The day money and title change hands and the property becomes yours. Typically 30 to 90 days after contracts are exchanged, with 42 days common.
Offset account and redraw
An offset is a transaction account linked to your loan. Its balance reduces the amount you pay interest on, while remaining fully accessible. Redraw lets you pull back extra repayments you have already made, but access can be restricted by the lender. An offset is generally more flexible, sometimes at the cost of a higher fee.
Strata and body corporate
If you buy an apartment or townhouse you are buying into a shared ownership scheme with compulsory levies, often several thousand dollars a year. Ask for the strata report before you buy. It reveals the building's finances, planned works, and any disputes.
Guarantor loan
A family member uses equity in their property as additional security, letting you borrow with little or no deposit and avoid LMI. It is a genuine and substantial risk to them, and it should be a conversation involving independent legal advice on both sides rather than a favour asked at a family dinner.
Stamp duty
A state tax on property transfer, usually the largest single cost after the deposit. First home buyer exemptions and concessions exist in every state with different thresholds. Use your state revenue office's calculator.