Property and Building Glossary: 60 Terms Australian Buyers Should Know

Finance terms

LVR (Loan-to-Value Ratio): loan amount divided by the property value — an 80% LVR means 20% deposit. LMI (Lenders Mortgage Insurance): insurance protecting the lender (not you) when LVR exceeds 80%; typically $10,000–$30,000, often capitalised into the loan. Genuine savings: deposit funds held or accumulated over typically 3–6 months; grants can supplement but rarely replace them. Pre-approval / conditional approval: a lender's indicative commitment subject to valuation and final checks. Construction loan: a loan releasing funds in build stages against invoices and inspections, usually interest-only during construction. Drawdown: each staged release of loan funds. Offset account / redraw: facilities that reduce interest or return extra repayments. Comparison rate: the interest rate including most fees, enabling like-for-like loan comparisons.

Land and legal terms

Settlement: the legal completion of a purchase, when funds transfer and title moves. Cooling-off period: the state-mandated window (typically 5 business days, waivable in auctions) to withdraw from a contract for a small penalty. Plan of subdivision: the registered map carving land into lots; estates sell before (unregistered) or after (registered) registration. Covenant: private building rules registered on title (minimum home size, facade standards). Easement: a right for services or access over part of your land. Encumbrance: any claim on title — mortgage, caveat, covenant. Conveyancer/solicitor: the licensed professional who handles the legal transfer. Deposits bond/guarantee: a substitute for a cash deposit in some purchases. Certificate of Title: the record of ownership and interests in land.

Construction terms

Slab: the concrete foundation, first construction stage. Frame stage: wall and roof framing complete — the first major drawdown point. Lock-up: the home is enclosed (windows, doors, cladding) and weatherproof. Fit-out: internal trades — plaster, joinery, tiling, services fit-off. Practical completion (PC): the builder declares the home complete per contract. PCI (Practical Completion Inspection): your pre-handover defect inspection. Handover: keys exchanged on final payment. Defect liability period: the post-handover window in which the builder must rectify defects, layered on statutory warranty periods (which run for years and vary by state). HIA / MBA contract: the standard industry building contracts used in most states. Variation: a contract amendment to scope, usually costed at a margin. Retention: a withheld portion of final payment pending defect rectification, where agreed. Turnkey: a fixed price including everything needed to move in.

Frequently asked questions

What is the difference between LMI and mortgage protection insurance?

LMI protects the lender if you default; it does not protect you. Mortgage protection insurance covers your repayments if you cannot pay due to illness or injury — a different product entirely, sold separately.

What does 'subject to finance' mean in a contract?

A condition making the contract depend on loan approval by a stated date. If finance is declined within the period, you can usually withdraw and recover your deposit. Waiving it strengthens an offer but transfers all finance risk to you.

What is a sunset clause?

A contract clause setting a deadline (common in off-the-plan and unregistered land) after which either party may rescind if the project has not reached a defined milestone — protecting buyers from indefinite delays.

Where can I verify builder licensing and warranties?

Every state has a building authority register (for example, Victorian Building Authority, NSW Fair Trading, Queensland Building and Construction Commission) where licences, insurance and dispute history can be checked before you sign.

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