--- title: Home Loan & Property Glossary Australia | GNT Finance description: Plain-English definitions of 120 Australian home loan and property terms: LVR, LMI, offset, comparison rate, Section 32, land transfer duty, FHOG, LRBA and CGT. url: https://gntfinance.com.au/glossary/ section: core updated: 2026-09-01 author: Gorakh Timilsina, GNT Finance --- # Home Loan & Property Glossary (Australia) **In short:** This glossary defines the terms you will meet when buying, financing or investing in property in Australia, with Victorian specifics where they matter: loan jargon such as LVR, LMI, offset and comparison rate; legal terms such as Section 32, caveat and Torrens title; tax terms such as land transfer duty, CGT and negative gearing; and scheme names such as the First Home Guarantee and Help to Buy. Lenders, conveyancers and agents use these words as if everyone knows them. Now you will. Terms are alphabetical; where a fuller explanation exists on this site, the definition links to it. If a word you have been given is missing, ask us on 0426 403 703 and we will add it. ## A ### ABN An Australian Business Number, the 11-digit identifier issued to businesses and sole traders. Lenders check how long an ABN has been registered to judge how established a self-employed borrower is, and most want at least one to two years of trading before approving a full-doc loan. ### Absentee owner surcharge An additional 4% land tax surcharge in Victoria on land owned by absentee individuals, corporations or trusts, generally meaning foreign persons who do not ordinarily reside in Australia. It is charged on top of standard land tax and is separate from the vacant residential land tax. ### ACL (Australian Credit Licence) The licence issued by ASIC that a lender or broker must hold, or operate under as a credit representative, to engage in consumer credit activities. Holding an ACL brings responsible lending obligations, dispute resolution requirements and membership of AFCA. ### Adjustments The pro-rata apportionment at settlement of council rates, water charges, owners corporation fees and land tax between vendor and purchaser, so each pays only for the period they own the property. Your conveyancer prepares the statement of adjustments. ### AFCA The Australian Financial Complaints Authority, the free external dispute resolution body for consumers with unresolved complaints against banks, lenders, brokers and insurers. You must try the firm's internal complaints process first. Decisions are binding on the financial firm but not on you. ### Aggregator A company that sits between individual mortgage brokers and lenders, providing the lender panel, software, compliance support and commission processing. Most brokers in Australia operate through an aggregator rather than holding direct accreditation with every lender. ### Alt doc Alternative documentation lending for self-employed borrowers who cannot yet provide full tax returns. Income is verified with BAS statements, business bank statements or an accountant's declaration. Alt doc is the modern, more rigorous successor to the old low doc loan. ### Amortisation The gradual repayment of a loan's principal over its term through regular repayments. Early in a 30-year loan most of each repayment is interest; later, most is principal. An amortisation schedule shows the split for every repayment. ### Asset finance Loans and leases used to buy income-producing assets such as vehicles, trucks, machinery and equipment, typically secured by the asset itself. Includes chattel mortgages, finance leases and novated leases. See our [car loans](/services/car-loans/) page. ### Auction A public sale where buyers bid openly and the property sells to the highest bidder above the reserve. In Victoria there is no cooling-off period at auction, or within three clear business days before or after a publicly advertised auction, and the contract is unconditional. ## B ### BAS Business Activity Statement, the periodic return a business lodges with the ATO for GST and PAYG. Lenders use recent BAS statements to verify turnover for self-employed borrowers, especially in alt doc lending where tax returns are not yet available. ### Basic loan A no-frills home loan with a low interest rate and few fees, usually offering redraw but not a full offset account or package benefits. Well suited to borrowers who value the lowest cost over features. ### Best Interests Duty The legal obligation, in force since January 2021 under the National Consumer Credit Protection Act, requiring mortgage brokers to act in the best interests of the borrower and to prioritise the borrower's interests over their own when recommending a loan. See [Best Interests Duty](/legal/best-interests-duty-mortgage-brokers/). ### Body corporate The older term, still used in some states, for the entity that manages common property in a strata or subdivided development. In Victoria the correct legal term is owners corporation, although agents and residents still say body corporate in conversation. ### Break cost A fee charged when you repay, refinance or make excess repayments on a fixed-rate loan before the fixed term ends. It compensates the lender for the difference between your fixed rate and current wholesale rates, and can be substantial when rates have fallen since you fixed. ### Bridging loan Short-term finance that lets you buy a new property before selling your existing one. Interest is usually capitalised during the bridging period, and the loan is repaid from the sale proceeds. See [bridging loans](/services/bridging-loans/). ## C ### Capital gains tax (CGT) Tax on the profit from selling an asset such as an investment property, calculated as sale price less cost base and added to your income in the year of sale. Assets held more than 12 months receive a 50% discount for individuals. Your main residence is exempt. ### Cash-out Borrowing against equity in a property to receive funds for a purpose other than buying that property, such as renovations, a deposit on another property or debt consolidation. Lenders ask for the purpose and may cap cash-out at higher LVRs. ### Cashback A lump sum a lender pays a borrower, historically $2,000 to $4,000, for refinancing or taking out a new loan. Cashbacks come and go with market conditions and should be weighed against the rate and fees of the loan. ### Caveat A legal notice lodged on a property's title warning that a third party claims an interest in it. A caveat prevents dealings such as sale or mortgage until it is withdrawn or removed. See [caveats on property](/legal/caveats-on-property/). ### Chattel mortgage A business vehicle or equipment loan where the borrower takes ownership from day one and the lender holds a mortgage over the asset. Popular with sole traders and companies because GST on the purchase can be claimed upfront and interest and depreciation are deductible. ### Clawback The repayment of upfront commission a broker must make to the lender if a loan is discharged within a set period, typically two years. Clawback is the broker's cost, not the borrower's, and cannot be passed on to home loan customers. ### Commercial loan A loan to buy or refinance commercial property such as shops, offices, warehouses or factories, or to fund a business. Deposits are larger, terms are shorter and assessment focuses on rental income and the business. See [commercial property loans](/services/commercial-property-loans/). ### Comparison rate A rate that combines the interest rate with most upfront and ongoing fees, calculated on a standard $150,000 loan over 25 years, so borrowers can compare loans on true cost. It excludes some fees and does not reflect offset benefits. See [comparison rate explained](/guides/comparison-rate-explained/). ### Comprehensive credit reporting The system under which lenders share both positive and negative data with credit bureaus, including 24 months of repayment history on loans and cards. Under CCR a lender can see whether you paid on time, not just whether you defaulted. ### Conditional approval Another name for pre-approval: a lender's agreement to lend up to a stated amount subject to conditions such as a satisfactory valuation, verification of any outstanding documents and no change in your financial circumstances before settlement. ### Construction loan A loan for building a home where funds are released in stages as construction progresses, and interest is charged only on the amount drawn. Requires a fixed-price building contract, plans and council approval. See [construction loans](/services/construction-loans/). ### Contract of sale The legally binding document setting out the terms on which a property is sold: price, deposit, settlement date, inclusions and any special conditions. In Victoria it must be accompanied by a Section 32 vendor statement. See [contract of sale](/legal/contract-of-sale-victoria/). ### Conveyancer A licensed professional who handles the legal transfer of property, reviewing the contract and Section 32, conducting searches, preparing transfer documents, calculating adjustments and attending settlement. Solicitors also perform conveyancing. ### Cooling-off period In Victoria, three clear business days after signing a private-sale contract during which the buyer may withdraw, forfeiting $100 or 0.2% of the price, whichever is greater. It does not apply at or around auctions. See [cooling-off period](/legal/cooling-off-period-victoria/). ### Covenant A restriction registered on a title that limits how land can be used, such as minimum dwelling size, building materials or a prohibition on subdivision. Common in new estates in Melbourne's growth corridors. ### Credit score A number generated by a credit bureau from your credit file that summarises your creditworthiness. Lenders use scores and the underlying file to assess risk. Enquiries, defaults, late payments and short credit histories reduce it. See [credit score and home loans](/guides/credit-score-and-home-loans/). ### Cross-collateralisation Using more than one property as security for one or more loans with the same lender. It can help with deposits but reduces flexibility, complicates selling one property and ties you to a single lender. ## D ### Debt-to-income ratio (DTI) Total debt divided by gross annual income. A borrower earning $150,000 with $900,000 of debt has a DTI of 6. Many lenders restrict lending above a DTI of 6 or 7, and APRA monitors high-DTI lending. ### Deposit The buyer's own contribution to the purchase, paid partly on signing the contract and the balance at settlement. Also refers to the amount paid on exchange, usually 10% of the price in Victoria, held in the agent's or conveyancer's trust account until settlement. ### Deposit bond A guarantee issued by an insurer that stands in place of a cash deposit when a contract is signed, with the full amount paid at settlement. Useful when funds are tied up in a sale or in super. See [deposit bonds](/legal/deposit-bonds/). ### Discharge The formal release of a mortgage from a property's title when the loan is repaid or refinanced. The outgoing lender charges a discharge fee and the Land Registry charges a discharge of mortgage fee. ## E ### Easement A right registered on a title allowing someone else, often a council or utility, to use part of the land for a purpose such as drainage, sewerage or access. Easements restrict where you can build and appear in the Section 32. ### Equity The difference between what a property is worth and what is owed on it. A home valued at $800,000 with a $450,000 loan has $350,000 of equity. Equity grows through repayments and price growth and can be borrowed against for renovations or investment. ## F ### Family Home Guarantee Part of the federal Home Guarantee Scheme allowing eligible single parents and single legal guardians to buy a home with a 2% deposit and no LMI, whether or not they are first home buyers. ### FHOG (First Home Owner Grant) Victoria's $10,000 grant for first home buyers who buy or build a new home valued up to $750,000, provided they live in it for 12 continuous months starting within 12 months of settlement. See [FHOG guide](/guides/first-home-owner-grant-victoria/). ### FIRB The Foreign Investment Review Board, which advises on and administers approvals for foreign persons buying Australian property. Temporary residents and foreign buyers generally need FIRB approval before purchasing. See [FIRB approval](/legal/firb-approval-for-property/). ### First Home Guarantee The federal scheme under which Housing Australia guarantees up to 15% of a loan so eligible first home buyers can buy with a 5% deposit and no LMI. From October 2025 it has no income caps and unlimited places, with a $950,000 price cap in Melbourne and Geelong. See [First Home Guarantee](/guides/first-home-guarantee-5-percent-deposit/). ### Fixed rate An interest rate locked for a set period, usually one to five years, giving certainty of repayments. Fixed loans limit extra repayments, rarely offer a full offset account, and attract break costs if ended early. At expiry the loan reverts to a variable rate. ### Foreign purchaser additional duty An extra 8% duty in Victoria on residential property acquired by foreign purchasers, including most temporary visa holders, on top of standard land transfer duty. See [foreign purchaser additional duty](/legal/foreign-purchaser-additional-duty-victoria/). ## G ### Genuine savings Funds a borrower has saved over time, typically at least 5% of the price held for three months, as evidence of financial discipline. Gifts and windfalls become genuine once held for three months. See [genuine savings explained](/guides/genuine-savings-explained/). ### Growth Areas Infrastructure Contribution (GAIC) A Victorian charge on land brought into the Urban Growth Boundary since 2005, payable once when the land is first subdivided, developed or sold. It funds infrastructure in growth areas such as Hume, Whittlesea and Wyndham. Developers usually pay it before house-and-land lots reach buyers. ### Guarantor A person, usually a parent, who offers equity in their own property as additional security for a borrower's loan, allowing a purchase with little or no deposit and no LMI. The guarantee is typically limited to a portion of the loan. See [guarantor home loans](/services/guarantor-home-loans/). ## H ### Hardship (financial hardship) A situation where a borrower cannot meet repayments due to illness, job loss, relationship breakdown or similar. Under the National Credit Code you may request a hardship variation and the lender must respond within 21 days. See [financial hardship rights](/legal/financial-hardship-rights/). ### Help to Buy The federal shared-equity scheme in which the government contributes up to 40% of a new home's price or 30% of an existing home's, with a 2% buyer deposit, subject to income caps of $100,000 for singles and $160,000 for couples. See [Help to Buy](/guides/help-to-buy-shared-equity-scheme/). ### HEM The Household Expenditure Measure, a benchmark of basic living expenses by household size, income and location that lenders use as a floor when assessing serviceability. If your declared expenses are below HEM, the lender uses HEM. ### HomeBuilder (historical) A federal grant of $25,000 then $15,000 offered in 2020 and 2021 for new builds and substantial renovations during the pandemic. It has closed and is mentioned here because buyers still ask about it. ### Honeymoon rate An introductory discounted interest rate offered for the first year or two of a loan before reverting to a higher standard rate. Always check the revert rate and the comparison rate. ### House-and-land package A bundled purchase of a vacant lot and a building contract, common in Mickleham, Kalkallo and Donnybrook. Duty is usually charged on the land only, and the build is financed with a construction loan. See [house-and-land packages](/services/house-and-land-packages/). ## I ### ICR (interest cover ratio) A measure used in commercial lending: net rental income divided by interest expense. Lenders typically require an ICR of 1.5 or higher on commercial property loans, meaning the rent must cover interest one and a half times over. ### Interest capitalisation Adding unpaid interest to the loan balance rather than paying it as it accrues, so interest is charged on interest. Common in bridging loans and construction loans during the build. ### Interest-only A repayment type where you pay only the interest for a set period, usually one to five years, without reducing the principal. Popular with investors; more expensive over the life of the loan. See [interest-only loans explained](/guides/interest-only-loans-explained/). ### Investment loan A home loan secured by a property that is rented out rather than lived in. Lenders charge higher rates on investment loans and assess rental income at a discount, usually 70% to 80% of the gross rent. ## J ### Joint tenants A form of co-ownership in which owners hold equal undivided shares and the survivor automatically inherits the other's share on death. The default for couples. See [joint tenants versus tenants in common](/legal/joint-tenants-vs-tenants-in-common/). ## L ### Land tax An annual Victorian state tax on the total site value of land you own, excluding your principal place of residence. Rates start at $500 for holdings from $50,000 and rise in bands to 2.65% above $3 million. See [land tax explained](/legal/land-tax-victoria-explained/). ### Land transfer duty The formal name for stamp duty in Victoria: a state tax on the transfer of property, calculated on a sliding scale of the purchase price or market value, whichever is higher, with concessions for owner-occupiers and first home buyers. ### LMI (lenders mortgage insurance) A one-off insurance premium paid by the borrower that protects the lender against loss if the borrower defaults, usually required when the LVR exceeds 80%. It can be added to the loan. See [understanding LVR and LMI](/guides/understanding-lvr-and-lmi/). ### LMI capitalisation Adding the LMI premium to the loan balance rather than paying it in cash at settlement. It increases the loan and the LVR slightly, and interest is charged on the premium for the life of the loan. ### Loan term The period over which a loan is scheduled to be repaid, most commonly 30 years for home loans in Australia. Longer terms lower each repayment but increase the total interest paid. Lenders may shorten the term for older borrowers to align with retirement age. ### Low doc An older style of self-employed lending in which income was self-declared with minimal verification. Since responsible lending laws, low doc has largely been replaced by alt doc loans that verify income through BAS or bank statements. See [low doc loans explained](/guides/low-doc-loans-explained/). ### LRBA (limited recourse borrowing arrangement) The only structure under which a self-managed super fund may borrow to buy property. The asset is held in a separate bare trust, and the lender's recourse if the fund defaults is limited to that asset. See [SMSF loans](/services/smsf-loans/). ### LVR (loan-to-value ratio) The loan amount as a percentage of the lender's valuation of the property. A $520,000 loan on a $650,000 home is 80% LVR. LVR determines interest rate tiers and whether LMI applies. See the [LVR calculator](/calculators/lvr/). ### LVR tiers The bands lenders use to price loans by risk, commonly up to 60%, 60% to 70%, 70% to 80%, 80% to 90% and 90% to 95%. Lower LVR usually means a lower rate. ## M ### Medicare levy A 2% levy on taxable income that funds public health care, paid in addition to income tax by most Australian residents. Lenders deduct it when calculating after-tax income for serviceability. ### Mortgagee The lender that holds a mortgage over a property as security for a loan. A "mortgagee sale" is a sale forced by the lender after default. The mortgagee's interest is registered on the title until the loan is discharged. ### Mortgagor The borrower who grants the mortgage over their property to the lender. Borrowers are often surprised to learn they are the mortgagor, not the mortgagee. The mortgagor keeps ownership and possession of the property while the loan is repaid. ## N ### NCCP Act The National Consumer Credit Protection Act 2009, the federal law regulating consumer lending in Australia. It establishes licensing, responsible lending obligations, the National Credit Code and the broker Best Interests Duty. See [NCCP Act](/legal/national-consumer-credit-protection-act/). ### Negative gearing An investment strategy in which a property's deductible expenses, including interest, exceed its rental income, producing a loss that reduces the investor's taxable income. The investor funds the shortfall each year in expectation of capital growth. See [negative gearing explained](/guides/negative-gearing-explained/). ### Non-conforming loan A loan for borrowers who do not meet mainstream lender criteria because of credit history, income documentation or property type, offered by specialist lenders at higher rates. Often used as a stepping stone before refinancing to a prime lender. ### Novated lease A three-way car finance arrangement between an employee, employer and financier in which lease payments are deducted from pre-tax salary. The vehicle can be used privately and the lease moves with the employee if they change jobs. ## O ### Off the plan Buying a property, usually an apartment or townhouse, before it is built, based on plans and specifications. Victoria's temporary off-the-plan duty concession ends on 20 October 2026. See [buying off the plan](/guides/buying-off-the-plan/). ### Offset account A transaction account linked to a home loan whose balance is offset against the loan when interest is calculated. $30,000 in offset against a $600,000 loan at 6.00% p.a. saves about $1,800 a year in interest. See [offset versus redraw](/guides/offset-vs-redraw/). ### Owner-occupier A borrower who lives in the property securing the loan. Owner-occupier loans attract lower rates than investment loans and are eligible for principal place of residence duty concessions and land tax exemption. ### Owners corporation The Victorian legal entity that manages common property, insurance and shared expenses in a subdivided development such as an apartment block or townhouse estate. Owners pay levies and are bound by its rules. See [owners corporation](/legal/owners-corporation-strata-victoria/). ## P ### Package loan A home loan bundled with an offset account, credit card, fee waivers and rate discounts for an annual fee of roughly $300 to $400. Worth it when the rate discount on your balance exceeds the fee. ### PEXA Property Exchange Australia, the electronic platform through which almost all Victorian property settlements now occur. Conveyancers, lenders and the Land Registry complete the transfer and mortgage online in a single workspace. ### PPR (principal place of residence) The home you live in. PPR status determines eligibility for the duty concession, land tax exemption, CGT main residence exemption and owner-occupier loan rates. Most concessions require you to move in within 12 months and stay for 12 months. ### PPR concession Victoria's reduced land transfer duty for owner-occupiers buying between $130,001 and $550,000, calculated as $2,870 plus 5% of the excess over $130,000 up to $440,000, then $18,370 plus 6% of the excess over $440,000. See [stamp duty concessions](/legal/stamp-duty-exemptions-and-concessions-victoria/). ### Pre-approval A lender's conditional agreement to lend up to a stated amount after assessing your income, expenses, debts and credit file, subject to a suitable property and valuation. Usually valid for 90 days. See [home loan pre-approval](/guides/home-loan-pre-approval/). ### Precinct Structure Plan (PSP) A master plan prepared by the Victorian Planning Authority for a new suburb in a growth area, setting out roads, town centres, schools, parks and housing density. Suburbs such as Kalkallo, Donnybrook and Mickleham each have PSPs. ### Principal The amount borrowed, excluding interest and fees. Repayments on a principal and interest loan reduce the principal over time, while interest-only repayments leave it unchanged. Interest is calculated daily on the outstanding principal. ### Principal and interest (P&I) A repayment type where each payment covers the interest accrued and part of the principal, so the loan is fully repaid by the end of the term. The standard structure for owner-occupied home loans. ### Progress payment A stage payment released by a construction lender to the builder at defined milestones: deposit, base, frame, lock-up, fixing and completion. The lender usually inspects before each release. See [construction loan progress payments](/guides/construction-loan-progress-payments/). ## R ### Rate lock A feature allowing you to lock a fixed interest rate at application rather than at settlement, for a fee, protecting you if rates rise before your loan settles. Typically the lock lasts 60 to 90 days and costs a few hundred dollars or a percentage of the loan. ### Redraw facility A loan feature that lets you withdraw extra repayments you have made above the scheduled amount. Less flexible than an offset account and, for investors, withdrawals can affect tax deductibility. ### Refinance Replacing an existing loan with a new one, from the same or a different lender, to obtain a better rate, different features, access to equity or debt consolidation. See [refinancing](/services/refinancing/). ### Regional Home Guarantee A former stream of the Home Guarantee Scheme for regional buyers with a 5% deposit. Its function is now covered by the expanded First Home Guarantee, which has no income caps and applies to regional Victoria with a $650,000 price cap. ### Rentvesting Buying an investment property in an affordable area while renting where you prefer to live. Trades first home buyer concessions and the main residence CGT exemption for lifestyle flexibility. See [rentvesting](/guides/rentvesting/). ## S ### Section 32 The vendor statement Victorian sellers must provide before a contract is signed, disclosing title, mortgages, easements, covenants, zoning, planning overlays, owners corporation details, rates and any building permits. See [Section 32 vendor statement](/legal/section-32-vendor-statement/). ### Serviceability A lender's assessment of whether you can afford a loan, comparing your income against living expenses, existing debts and the proposed repayments calculated at your rate plus a 3 percentage point buffer. ### Settlement The completion of a property transaction, when the balance of the price is paid, the loan is funded, the title is transferred and the buyer takes possession. See [settlement process](/legal/settlement-process-victoria/). ### Settlement statement The document prepared by the conveyancer showing the final amounts payable at settlement: price, deposit already paid, adjustments for rates and other outgoings, loan funds, and the balance due from the buyer. ### Shared equity An arrangement in which a government or other party contributes part of a property's price in return for a proportional ownership share, reducing the buyer's deposit and loan. Help to Buy is the federal shared equity scheme. ### SMSF (self-managed super fund) A private superannuation fund of up to six members who are also the trustees, allowing direct control over investments including property. SMSFs may borrow to buy property only through an LRBA. See [SMSF property guide](/guides/smsf-property-investment-guide/). ### Split loan A loan divided into two or more portions, typically one fixed and one variable, to combine repayment certainty with flexibility. A common structure is 50% fixed and 50% variable with an offset against the variable portion. See the [split loan calculator](/calculators/split-loan/). ### Stamp duty The common name for land transfer duty, the state tax on property purchases. In Victoria it is calculated on a sliding scale, with a $650,000 home attracting $34,070 at general rates. See the [stamp duty calculator](/calculators/stamp-duty/). ### Stamp duty concession Any reduction in land transfer duty for eligible buyers: the first home buyer exemption up to $600,000 and concession to $750,000, the PPR concession to $550,000, the pensioner concession, and the temporary off-the-plan concession. ### Strata A form of title in which individual lots such as apartments are owned separately while common areas are owned jointly. In Victoria the equivalent structure is a subdivision managed by an owners corporation. ### Sunset clause A clause in an off-the-plan contract allowing either party to rescind if the plan of subdivision is not registered by a specified date. In Victoria a vendor may only rescind under a sunset clause with the buyer's consent or a court order. ## T ### Tenants in common A form of co-ownership in which owners hold defined shares, equal or unequal, that pass under each owner's will rather than automatically to the survivor. Common for friends or family buying together. ### TFN Tax File Number, your unique identifier with the ATO. Lenders do not require your TFN for a loan, but it appears on the notices of assessment used to verify self-employed income. ### Title The legal record of ownership of land, held in Victoria by Land Use Victoria. The certificate of title shows the owner, any mortgages, caveats, easements and covenants. Titles are now electronic, and the lender controls the title while a mortgage is registered. ### Title insurance An optional one-off insurance policy protecting a buyer against losses from title defects, unapproved structures, boundary encroachments and fraud that searches did not reveal. Premiums are a few hundred dollars and cover lasts for as long as you own the property. ### Top-up An increase to an existing home loan with the same lender, usually to access equity for renovations, a car or an investment deposit. Faster than a refinance because the lender already holds your security. ### Torrens title The system of land registration used throughout Australia in which the government register is the conclusive proof of ownership, guaranteed by the state. Almost all Victorian residential property is Torrens title. ### Trail commission The small ongoing commission a lender pays a broker each month for the life of a loan, typically a fraction of a percent of the outstanding balance, in return for continuing to service the client. ## U ### Unconditional approval Formal approval issued after the lender has valued the property and verified all conditions, meaning it is committed to funding the loan. Also called formal or full approval. Only unconditional approval should be relied on to waive a finance clause or bid at auction. ### Usable equity The portion of equity a lender will let you borrow against, usually 80% of the property's value less the existing loan. A home worth $800,000 with a $450,000 loan has $190,000 of usable equity. See the [equity calculator](/calculators/equity/). ## V ### Vacant residential land tax (VRLT) An annual Victorian tax on residential properties left unoccupied for more than six months in a calendar year, applying state-wide at 1% of capital improved value in the first year and rising for consecutive years. See [VRLT](/legal/vacant-residential-land-tax-victoria/). ### Valuation A lender's independent assessment of a property's market value, used to calculate LVR. Lenders lend against the lower of the valuation and the purchase price. Valuations may be automated, desktop, kerbside or full inspection depending on the LVR and property type. ### Variable rate An interest rate that can change at the lender's discretion, usually following movements in the RBA cash rate and funding costs. Variable loans allow unlimited extra repayments and full offset. ### Vendor The seller of a property. The vendor's conveyancer or solicitor prepares the contract of sale and the Section 32 vendor statement, and the vendor is bound by the disclosure obligations in the Sale of Land Act. ## W ### WALE (weighted average lease expiry) A commercial property measure of the average remaining lease term across all tenants, weighted by rent or area. Lenders prefer a longer WALE because it indicates secure income. A WALE of three years or more is generally viewed favourably for retail and office property. ## Y ### Yield Annual rental income as a percentage of a property's value. A home worth $650,000 renting for $550 a week has a gross yield of about 4.4%. Net yield deducts expenses. ## Z ### Zoning The planning classification of land under the local planning scheme, such as General Residential, Neighbourhood Residential or Mixed Use, which controls what can be built. Zoning is disclosed in the Section 32 and affects lender security assessment. ## Talk to GNT Finance Knowing the words is the start; applying them to your own purchase is where we come in. GNT Finance helps buyers, owners and investors across Melbourne's north and all of Victoria from our Mickleham office, in English, Nepali and Hindi, and our home-loan service is at no cost to you in most cases. [Book a free consultation](/contact/) or call 0426 403 703.