Please visit rams.com.au/terms to view FAQs relating to changes to your home loan General Terms.
  • Glossary of useful terms and definitions

  • The language and jargon used in purchasing a property can be very confusing. Here's an A-Z glossary of commonly used words and phrases, with easy-to-understand definitions for each one.
    Something missing? Contact us to let us know.
  • F


    • Fittings

      Items that can be removed from a property without causing damage to it. Fittings which will remain in the property must be specified in the contract for sale.

    • Fixed interest rate

      An interest rate for a home loan, set for an agreed period.

      Fixed interest rate loans offer more certainty of repayment than variable interest rate loans because the interest rate does not change for a specified period of time (usually between 1-5 years but even up to 10 years). At the expiry of the fixed rate period the interest rate generally reverts to a variable interest rate unless a further fixed rate period is agreed with the lender. 

      Repayments are set during the fixed rate period

      • This provides greater certainty over your home loan repayments.
      • Fixed interest rates are not affected by changing economic conditions and do not move up and down like variable interest rate loans, during the fixed rate period.

      Provides more certainty for people on a strict budget

      • As payments are known, you can plan your lifestyle accordingly.
      • You have a greater ability to prepare an accurate monthly budget.
      • First home buyers and investors, in particular, may appreciate the increased certainty and security.

      Repayments don’t fall if rates fall

      • Where the interest rate is fixed, while the interest rate can be lower during periods of high interest rates they can be higher during low interest rate periods.

      Less flexibility to make additional payments

      • Lenders may charge you a fee, or break costs, for making early repayments where you have a fixed interest rate loan, which can be substantial.  So if your lender charges such a fee and you wish to make additional repayments you either need to wear this additional fee or wait until the expiry of the fixed rate period.
      • If your circumstances change or you feel another loan option is more suitable, you may still have the option to switch to an alternative loan, although fees and charges, including break costs, may apply. These can be significant so it is important to check with your lender.

      To find out whether the additional security and certainty of a fixed interest rate is right for you, or learn about the RAMS Fixed Rate home loan call 13RAMS, that's 137267.

    • Fixed rate break costs

      When a Lender lends you money at a fixed interest rate, they do so on the understanding that you will make certain fixed payments for the whole of the fixed rate period. Usually the Lender arranges their

      own funding position on the assumption that they will receive those payments. As a result, if you make certain changes to your loan, it will change that funding position. The Lender may make a loss from re-arranging their funding. As a result, you may be required to pay costs for breaking the fixed rate period depending on the circumstances.  Download Fixed rate break costs for more information.

    • Fixtures

      Items that would cause damage to a property if removed. Their removal must be stipulated in the contract of sale and any damage made good by the seller.

    • Freehold

      Freehold gives the purchaser complete and indefinite ownership of a property and the land on which it stands.

    • Frozen account

      An account in which all transactions have been suspended.