Six terms you need to know to be home loan ready

We asked our team of brokers to break down some of the most common (and misunderstood) terms you’ll hear when applying for a home loan.

1. Liabilities

Liabilities refer to formal ongoing obligations, such as a personal loans and HECS debt, which are separate to day-to-day expenses. Liabilities go on your Veda report (what lenders use to assess your credit application and determine risk) and reduce your credit score which reduces your approval chances.

2. Assessment rates

An Assessment Rate is the interest rate used when the lender is assessing the serviceability of your loan (your borrowing power). It is generally higher than the rate of the product you are applying for. For example, if the product’s interest rate is 5%, they may assess you on your ability to pay off the loan if the rate is at 7% (the higher rate is the assessment rate), which helps manage risk.

3. Fixed and variable rates

A fixed rate is a set interest rate for a determined period of time, usually between 1-5 years. Variable rates refer to loan products that have fluctuating interest rates. Fixed rates typically don’t have as many features attached to them such as offset accounts. When the RBA puts the cash rate up or down, lenders often increase or decrease their variable interest rates in line with the cash rate.

4. Living expenses

One of the big contributing factors in how much a bank will lend you to buy a home, is living expenses. Your broker (and lender) needs to know what you spend each week on groceries, takeaway, coffee, gym memberships and phone bills, for example, so they can subtract that from your earnings and work out how much you can safely afford to pay back.

5. Credit enquiries

A credit enquiry is applying for finance of any sort, e.g. a mortgage, credit card or personal loan. Most lenders do not like to see more than 6 credit enquiries within a 12-month period as each one can reduce your approval chances.

6. LMI

Lenders Mortgage Insurance (LMI) is an upfront charge you pay when borrowing over 80% of a property’s purchase price. It is an insurance policy paid by the borrower which covers the lender. People often hear that they can get a home loan with only a 5% deposit, however they are unaware of LMI which is an added cost that should be taken into account. Are you home loan ready?Book in a quick call with our customer care teamPhoto by Andrew Neel on Unsplash Book a call in with UNO

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John Carlo Penaflor
June 24, 2025
5 stars for our service reviews from clients
Amazing service from Scott. Efficient, clear and fast. Got my homeloan refinanced in record time.
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Rebekah Tolmachoff
June 24, 2025
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We had a fantastic experience working with Paul at Uno. From start to finish, he was professional, attentive, and genuinely cared about us and our situation. He kept in touch throughout the entire process, always keeping us informed and making everything feel simple and stress-free. Nothing was ever too much trouble, and his support made a big difference. Highly recommend Paul to anyone looking for a reliable and caring broker!
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Sally MacKenzie
June 10, 2025
5 stars for our service reviews from clients
We chose Uno Home Loans from their impressive web site knowing we were going to find it hard, on many fronts, to qualify for a home loan. We were incredibly fortunate to be assigned Mike Parsons as right from the get-go, despite the complexities, he hit the ground running for us. He was incredibly knowledgeable, with years of experience but what was immediately apparent and impressive was that he was totally invested in getting us over the line, doing absolutely everything possible, including working around the clock. Despite it being a relatively small loan in the order of things, Mike never missed a beat, getting docs ready, following up and answering every request from the proposed funder immediately. He kept us informed on progress the minute anything happened, and again if anything needed to be done, he was right on it. In short, we highly recommend Uno, and Mike, knowing what a remarkable job he did, over many weeks, to get us our loan. He got us a great deal, with far better rates than we expected, so we couldn't be happier. In fact, without doubt, you'd be hard pressed to find a more personable, sharp, hard working, dedicated professional who clearly prides himself on getting his customers standout results.
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Dylan Aubrey
May 31, 2025
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Jesse did a great job with helping me secure my loan, will be using him again in the future
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Tom Deal
May 30, 2025
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This is the second time I’ve worked with Mike Parsons, and I wouldn’t go anywhere else for mortgage advice. He’s extremely knowledgeable, responsive, and always happy to help. Mike takes a consultative approach, presenting clear options and making the whole process stress-free. Friendly, professional, and genuinely invested in getting the best outcome. Highly recommend and will definitely use him again!
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ShelleyGawith Functional Nutrition
May 27, 2025
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Paul was amazing to work with. He went out of his way to help us with every last question. He sorted everything out for us, was a wealth of knowledge in terms of who else to use to support us in the buying process. He made moving from New Zealand so easy. He explained everything to us in an easy to understand way. He really worked for us!!! Plus he's such a lovely funny guy, super approachable. Super responsive, has a great team. Totally took care of us in the whole process. I can't wait to use Paul again and would recommend him to every kiwi moving over and all our aussie friends :)
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Matt Carter
May 21, 2025
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Paul from Uno has been amazing. Made it so easy! Highly recommend and made the finance process much more enjoyable experience for us.
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Timothy Semsarian
May 17, 2025
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UNO went above and beyond to help my wife and I with our home loan and settlement. Couldn’t recommend them enough - Jake Wood was an absolute legend! Kept us informed during the whole process and was very thorough with his work, even with a very tight timeframe. Thank you again for all your help, and looking forward to continue using your services!
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Patti Jo Mogensen
May 16, 2025
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100% Rockstar. We found Paul and Uno Home Loans from recommendations from people who had used his services. We know understand why he comes so highly recommended. We definitely put Paul and his team under pressure due to an oversight our end which meant that he had to don his superman cape and work miracles for us. We didn't appreciate the very very short window we created for ourselves (think less than two weeks for settlement). Paul was able to wave his magic wand, come up with multiple solutions to our situation and make it all happen seamlessly. It goes without saying then, without reservation that we recommend Paul and his team as our trusted mortgage advisor! Thanks again Paul. *****The limoncello is on route we promise :)
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Lani Wards
May 13, 2025
5 stars for our service reviews from clients
Paul Davey worked very hard to get us the mortgage we required for our investment property. He is knowledgeable and approachable. Thanks Paul!
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Michael Badham
May 13, 2025
5 stars for our service reviews from clients
Our entire process with Uno went very well. We had a unique set of requirements for our loan and our super friendly broker Mike Parsons managed to secure us the perfect outcome. Mike also worked above and beyond our expectations to make sure the whole process of completing the documentation of switching banks went smoothly.
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Vanessa Koster
May 13, 2025
5 stars for our service reviews from clients
The service recieved from Paul was fantastic. He made the whole process stress free & easy. We started the process from NZ & Paul had everything ready for approval as soon as we landed in Aus. I would highly recommend Paul if you require a mortgage. You won't be dissapointed.
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