From stamp duty pauses to mortgage holidays: Know July’s buzzwords

Do you regularly resort to sneaky Google searches to translate financial terms in the news? Then let this alphabetised glossary of July’s money jargon guide you through the financial section of any morning bulletin or weekend trivia night.

Cryptojacking
It sounds like alien car maintenance, but cryptojacking is actually a kind of cyber theft. What’s being ‘jacked’ is cryptocurrency, which is an overarching term for decentralised virtual currencies. If you mine crypto, which involves a lot of pricey computer hardware and epic energy consumption, a cryptojacker can hack into your system and use your equipment and electricity to mine it without your consent.

Home loan serviceability
This will pop up as you’re applying for a home loan to help lenders set loan terms (like repayment size and frequency). It’s a measure of how easily you’ll be able to pay off your mortgage while living comfortably, considering your income and expenses. Lenders have to be careful calculating your serviceability, as they can get in hot water for handing out home loans people can’t afford to repay. 

JobKeeper and JobSeeker extensions
With rising unemployment and uncertain economic conditions, income support schemes like JobKeeper and JobSeeker have been a financial lifeline for struggling Australians. Remember the extension of these payments until March 2021 (JobKeeper) and the end of 2020 (JobSeeker) come at differing rates and with some altered eligibility criteria. Read Mozo’s breakdown of the changes to find out more.

Mortgage holiday extensions 
Like the government support schemes, mortgage holidays have been riding the news cycle waves since Covid-19 crashed into Australia’s economy. They are a pause on home loan repayments which can be granted by lenders if you’re facing financial hardship. Most of these holidays were set to conclude in September, but the Australian Banking Association recently announced a four-month extension.

Open Banking
It’s time to reclaim your data! While it might not sound like a thrilling escapade, we’ve been waiting a long time for Open Banking to come to fruition. It enables bank customers to access data from their institution and share it with others (previously banks dictated this). It’s going to be a slow roll-out for this to happen across all financial institutions, but once it does, it should make it easier to switch providers, apply for new products and get more personalised rates. 

Risk-based pricing
Speaking of customisation, risk-based pricing embodies flexible borrowing. The standard lending model is to offer a single advertised interest rate on a loan. With risk-based pricing, lenders consider an individuals’ credit rating – their past borrowing experiences, bill payments, lingering debts – and offer more tailored loans based on this. It’s great for responsible borrowers and bill-payers as they can nab a better deal. But it could also be useful for those who need to build up their credit rating or revive an unhealthy score, as they can access financing without the eligibility barriers of traditional lending.

Stamp duty pause
Stamp duty is that niggling extra government charge when you purchase property. This cost differs depending on where you live, and there are various existing exemptions. If you’re a New South Wales resident considering buying your first home, it just got a little easier to skip this fee. In an effort to bolster the construction industry further, stamp duty has been paused for first homebuyers in NSW if they’re buying a new property. This was already an option, but now the price ceiling has been lifted so more buyers can get in on the bargain. 

Once you’ve wrapped your noggin around this glossary, see how your bank account compares to the options below.