Jade Agri Finance FAQs

20% is the usual deposit required. 5-10% deposit loans may be approved where the borrower meets specific lender criteria.

An offset account is a bank account that is establishment for many home loans. The account is used by the borrower as their everyday account and is linked to their mortgage payments. Income is deposited into the account and regular expenses, and the mortgage payments are deducted from the account. The interest on the loan is calculated based on the balance of the account and this may contribute to offsetting the interest on the mortgage.

A fixed rate is usually provided for 1-5 years and will not change during that time, regardless of if the lender changes their fixed rate home loans. A variable interest rate home loan can change when the lender changes their variable rates. This usually occurs when the RBA announces changes to the cash rate.

The lender advises the borrower when they can start building works after their loan application has been approved.

Lender Mortgage Insurance, LMI, is an insurance policy required by lenders as a risk measure. Borrowers must take out this policy when approved for a loan with less than 20% deposit. The borrower takes out and pays for the policy.

LVR is loan-to-value-ratio. With a home loan, this is the amount borrowed compared with the value or price of the house. Where a borrower has a 20% deposit, the LVR would be 80% – they are borrowing 80% of the value of the property.

A principal and interest home loan is a loan where both the applicable interest and part of the amount borrowed are included in each loan payment. The amount borrowed is being reduced with each payment along with paying off the interest.