Home loan jargon for first home buyers

February 9, 2026 0

Many first home buyers are confused about all the different terminology used as part of the home loan process. In this article, we have covered some of that jargon to help first home buyers so that they can feel confident when speaking to a mortgage broker or lender.

Comparison rate

This rate can help you identify the true cost of a loan. It is calculated using a formula that includes the interest rate as well as certain fees and charges relating to a loan.

LVR – Loan to value ratio

Percentage of your property value in comparison to the amount of money being borrowed. For example, if you property is worth $725,000 and you are borrowing $580,000, your LVR is 80%.

LMI – Lenders Mortgage Insurance

Lenders Mortgage Insurance is not home insurance policy and is there to protect your lender if you can’t pay your mortgage repayments. This is an additional cost to complete the transaction.

Deposit

This is the initial contribution you are going to pay towards the purchase. 20% deposit might usually help you avoid the LMI which is an additional cost.

Stamp Duty

Stamp duty is an additional cost which is the tax imposed by state governments on the purchase of real estate assets. Check how much stamp duty is payable using our easy to use stamp duty calculator.

It’s very important for first home buyers to think about all the costs involved in buying their first home before committing to something. Depending upon the property price and deposit, you might be able to avoid LMI and Stamp duty. From October 1st, the First Home Buyer Guarantee Scheme has been expanded, allowing more first home buyers to purchase their home with a 5% deposit.

Please contact us if you’re unsure about any of the above. As your local mortgage broker, we provide free consultation tailored to first home buyers in Schofields, Akuna Vista, Riverstone and nearby suburbs.

We’ll help you understand your options, navigate the complexities of buying your first home, and secure a loan that works for you.