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Week 5 - Coggle Diagram

- - - - Super annexation funds are a specific type of Managed fund where the objective is to save and invest over ones working life to provide means of income during retirement
    - - Open ended are liquid
- - - - Each loan repayment is interest only. The entire loan principal is due upon loan maturity
      - Eg. If you borrow 1 million dollars, you only. pay the interest monthly and at the end of the loan you pay the amount borrowed
    - - Each loan repayment compromises of interest and principal so that by the final repayment, the entire loan principal is payed off
      - The majority of home loans are fully amortizing
      - Less risky
    - - Each loan repayment compromises of interest and principal. However, by the final repayment, there is a loan principal balance remaining o be paid off
    - - Interest loan is fixed. Usually over a term of 1 to 5 years
    - - Interest cost is subject to change depending on how the banks price credit and changes the official cash rate
    - - Some financial institutions allow part of the loan to be fixed and the remaining part to be variable
    - - A financial institution will typically not lend you 100% of the money. The property buyer will have to accumulate and contribute an equity deposit that usually is the buyers savings of income over time
    - - The LVR is a % of the price that a financial institution will lend to a borrower. The most common LVR is 80%.