Offset accounts, LVR, salary sacrifice, concessional caps. If a word on this site stopped you, it is here, explained the way you would explain it to a friend. Anywhere you see a dotted underline on Funance, you can hover over it or tap it for the short version.
Paying off the debt with the highest interest rate first, while making minimum repayments on the rest. It costs the least interest overall.
Once the most expensive debt is gone, the money you were putting on it rolls onto the next highest rate. The alternative is the snowball method.
Compare both methods on your debts →Also called CGT
Tax on the profit when you sell something that has gone up in value, like an investment property or shares. Your own home is usually exempt.
The profit is added to your income for that year. If you owned the asset for more than 12 months, you generally only pay tax on half of the profit.
Also called catch-up contributions
If you did not use your full concessional cap in the last five years, you may be able to add the unused amount to super now at the lower 15% tax rate. Only if your super balance is under $500,000.
It is most useful in a year with a bonus, a big pay rise or a capital gain, when a larger top-up saves the most tax.
Project your super →Also called RBA cash rate
The interest rate set by the Reserve Bank of Australia. When it goes up or down, banks usually move their home loan rates the same way.
The Reserve Bank board meets eight times a year to decide whether to change it.
See what a rate change does to a loan →The most you can put into super each year at the lower 15% tax rate: $30,000 in 2026-27. Your employer's contributions count towards it.
Concessional contributions are the before-tax ones: what your employer pays, salary sacrifice, and personal contributions you claim a tax deduction for. Anything over the cap is taxed at your normal rate.
Project your super →Also called DGR
A charity the ATO has approved so that donations of $2 or more can be claimed as a tax deduction.
Not every charity is one. You can check a charity's status on ABN Lookup, and you need a receipt to make the claim.
An extra 15% tax on super contributions for people whose income plus super contributions is over $250,000. It makes the contributions tax 30% instead of 15%.
Even at 30%, super contributions are usually still taxed less than income at the top tax rate.
Project your super →How many reward points a credit card gives you for each dollar you spend on it.
Points are only worth something if you use them well, so a high earn rate does not automatically beat a card with a lower annual fee.
Check if your card is worth its fee →Also called zero-based budgeting
Giving every dollar a job before you spend it, like sharing cash out into labelled envelopes. If one envelope runs dry, you move money from another.
It is the method behind YNAB and Goodbudget. It is good at controlling spending, and less help with bigger decisions like super or the mortgage.
YNAB alternatives in Australia →Also called home equity
What your home is worth minus what you still owe on it. A $900,000 home with a $500,000 loan has $400,000 of equity.
You cannot borrow against all of it. The part a lender will usually let you use is called usable equity.
Work out your equity →Short for Financial Independence, Retire Early: saving and investing enough that you no longer need to work for money.
A common rule of thumb is a target of 25 times what you spend in a year. Funance uses the same rule for its FIRE number.
Plan a goal →A state government discount on stamp duty for people buying their first home. Below a price limit it can cut stamp duty to zero.
Each state sets its own limits and rules. Funance models the concessions in Victoria, New South Wales and Queensland.
Plan a home deposit →Also called student loan
Your government student loan. Repayments come out through your tax once your income passes a set level, and the balance goes up each year roughly in line with inflation.
That yearly increase is called indexation. There is no interest on top, and paying it off early is a choice rather than a requirement.
How Funance handles tax →Also called LMI
A one-off cost you usually pay when your home deposit is less than 20% of the price. It protects the bank if you cannot repay, not you.
It is often added to the loan, so you pay interest on it too. Some government first home buyer schemes let you avoid it with a smaller deposit.
Plan a home deposit →Also called LVR
Your loan as a percentage of your home's value. A $600,000 loan on a $750,000 home is an 80% LVR.
Lenders care about it a lot. Below 80%, you usually avoid lenders mortgage insurance and get better rates.
Work out your equity →Also called LITO
A tax discount of up to $700 for people on lower incomes. It shrinks as your income rises and is gone above $66,667.
It is applied automatically when your tax is worked out. You do not need to claim it.
How Funance handles tax →The tax rate on the next dollar you earn. It is why a pay rise or an extra shift is taxed at a higher rate than your pay as a whole.
In 2026-27 the rates are 0%, 15%, 30%, 37% and 45%, plus the 2% Medicare levy. Many money decisions, like salary sacrifice, depend on which rate you are on.
How Funance handles tax →A 2% charge on your taxable income that helps pay for Medicare. People on low incomes pay less or none.
It is separate from the Medicare levy surcharge, an extra charge for higher earners who do not have private hospital cover.
Everything you own minus everything you owe. It includes your home, super, savings and car, less your mortgage and other debts.
Tracked month by month, it shows whether you are actually getting ahead.
Add up your net worth →A bank account linked to your home loan. Money in it reduces the balance you are charged interest on, but you can still take it out whenever you like.
$20,000 in an offset against a $500,000 loan means you are charged interest on $480,000.
Model your home loan →Also called the Consumer Data Right (CDR)
The government-regulated way to let an approved app see your bank data, without giving it your internet banking password.
It is how apps like Frollo pull in your transactions automatically. Funance does not use it: you enter your own numbers.
Bank apps vs a budgeting app →The age you can generally start taking money out of your super once you retire. It is 60 for anyone born after 30 June 1964.
Project your super →Replacing your home loan with a new one, often with another lender, to get a lower rate or better features.
Switching has costs, such as discharge and application fees, so the saving needs to be worth more than the cost of moving.
Model your home loan →Asking your employer to pay part of your before-tax salary straight into super. It is taxed at 15% instead of your normal tax rate.
It counts towards your concessional cap, along with what your employer already pays.
See what it does to your super →The share of your income you keep after all your spending. Keeping $1,000 of a $5,000 month is a 20% savings rate.
Budget planner →Paying off your smallest debt first, then the next smallest. You clear whole debts sooner, which keeps some people motivated, but it usually costs more interest.
If the difference in interest turns out to be small, the best method is the one you will actually stick to.
Compare both methods on your debts →A state government tax you pay when you buy property. How much depends on the price and the state you buy in.
On a typical home it runs to tens of thousands of dollars, and it usually has to come out of your savings on top of the deposit.
Plan a home deposit →Also called SG
The super your employer must pay on top of your wage: 12% of your ordinary earnings.
Project your super →The part of your home equity a lender will usually let you borrow against: generally 80% of your home's value, minus what you still owe.
On a $900,000 home with a $500,000 loan, 80% of the value is $720,000, so usable equity is about $220,000.
Work out your usable equity →General information only, not financial advice. Figures are 2026-27 Australian settings and change from year to year.
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