Mortgage Glossary

A mandatory legal disclosure detailing the services advisers will provide or not provide, including loan types, lender networks, fees, and licensing limits, ensuring transparency and protection for both adviser and client.

A legal compliance document authorising mortgage brokers or financial advisers to act on your behalf with lenders and insurers for home loan matters.

Requires agencies collecting personal information indirectly to inform individuals why their data is collected.

A written document describing personalised lending recommendations, reasons, and costs, which advisers must keep for at least seven years for compliance.

A detailed interview to capture a client’s financial situation, including income, expenses, debts, assets, and goals, ensuring loan suitability.

How the home loan is set up (structured). It determines whether the client uses fixed, floating, or a split of different interest rates, the type of repayment, and whether they utilise specialised features like offset accounts or revolving credit facilities to pay off debt faster.

Links savings and transaction accounts to mortgage, charging interest only on the net balance. ASB and ANZ do not do Offset Loans.

Functions like a massive overdraft account. Salary goes directly into this account, effectively lowering the daily loan balance and saving interest before spending. Bank-specific names: ASB — Orbit Facility · ANZ — Flexi Facility · Westpac — Choice Everyday Account · BNZ — Rapid Repay Loan · Kiwibank — Revolving Credit.

Locking in a new fixed rate at loan term end.

Changing loan setup including rate types, repayments, term, and features like revolving credit or offset accounts.

Moving the mortgage to a new lender, typically to get a better interest rate or product.

Typically requires owner-occupiers to have at least 20% deposit and investors 30%, with some exemptions like Kāinga Ora loans and new builds.

Repayment breakdown showing principal versus interest payment portions and remaining balance over time.

Scheme for eligible first-home buyers to obtain loans with a 5% deposit.

Ratio of total debt to gross income; construction loans are exempt from RBNZ DTI restrictions.

A loan for building a home. Funds are released in progress payments (stage-based drawdown) as each stage of construction is completed.

Duration agreed to repay the full mortgage. Different from fixed-rate periods, which set the interest rate for a limited term while the loan continues toward full repayment.

Lender assessment to ensure borrowers can meet repayments, factoring in income, expenses, and a test interest rate to account for potential increases.

The base interest rate banks pay for overnight borrowing or deposits, influencing mortgage rates; rises increase loan costs, falls reduce repayments.

Interest rate locked for a set term.

Rate fluctuates with market changes.

Dividing the total loan into different portions. For example, a client might fix 80% of their loan over a 2-year term for budgeting security, and leave 20% on a floating rate so they can make penalty-free lump-sum repayments. Majority fixed for budget certainty, minority floating for flexibility.

A charge imposed when the client exits a fixed-rate mortgage before the term expires. Calculated based on the interest rate difference between the fixed rate and the current wholesale rate for the remaining term.

A lump-sum payment made by a lender when the client’s mortgage settles.

If the client repays their loan early soon after taking it out, the lender will ask the adviser to pay back some or all of the commission they paid the adviser.

Residential or commercial real estate bought not as a primary home but to earn rental income and long-term capital gains.

Home loan for a property occupied by the purchaser or spouse as main or secondary residence.

Loan for individuals who have never owned property, enabling access to government assistance to meet deposit requirements.

Official council report detailing legal, physical, and regulatory history of a property, required for bank lending.

Legally binding contract for property transactions, creating urgency when active.

Formal bank commitment to provide a home loan once all property conditions are met, allowing finance clause waiver.

Bank’s assessment stage of property as loan security, requiring documents like SPA, valuation, LIM, insurance, and builder’s report.

The day the property legally changes hands and the buyer receives the keys. Involves a lawyer or conveyancer, including the transfer of funds from buyer to seller, registration of ownership, and release of the keys. A critical step in the mortgage process, ensuring the buyer is legally and financially responsible for the property.

The portion of the purchase price the client pays from savings (not borrowed). Typically 20% for standard NZ mortgages; 5% under the First Home Loan.

The difference between the property’s market value and outstanding mortgage. For example, a $600,000 home with a $400,000 mortgage has $200,000 equity.

A system containing client profiles, activities, notes, documents, pipeline stages, and email templates.

Approved tool for recording, transcription, and AI-assisted note-taking.

Service provider managing Google Reviews.

Online booking and appointment system linked to Trail, allowing clients to schedule, reschedule, or cancel appointments.