Bank of Melbourne home loans

Bank of Melbourne offers home loans designed for first home buyers, refinancers, borrowers wanting to build a home, borrowers looking for bridging finance, property investors, and more. They also offer package loans, which come with an offset account, credit card, and the option to add home insurance or landlord insurance.

However, when it comes to what types of borrowers Bank of Melbourne lends to, there are some points that prospective borrowers should keep in mind.

The first is that Bank of Melbourne has a minimum required loan-to-value ratio (LVR) of 95%, meaning it will be unlikely that you will be approved for a home loan with Bank of Melbourne if your saved deposit is less than 5% of your total proposed loan size. As of May 2024, Bank of Melbourne is offering a 0.10% p.a. rate discount to borrowers with an LVR of 70% or less.

Bank of Melbourne also likely won’t give you a home loan if you aren’t able to repay your proposed home loan at a rate 3% higher than the advertised interest rate. This is because the Australian Prudential Regulation Authority (APRA) requires all lenders to assess an applicant’s ability to service their proposed home loan in the event of interest rate hikes.

Yes, Bank of Melbourne provides home loans to first home buyers. While they don’t have a specific home loan product designed for first home buyers, they have several informational resources designed to help first home buyers navigate the process of buying a home.

Yes, Bank of Melbourne is one of the 33 participating lenders selected by the Federal Government to offer the Home Guarantee Scheme. The Home Guarantee Scheme helps certain home buyers secure a home loan with a deposit smaller than 20%, without having to pay lenders mortgage insurance (LMI).

The Home Guarantee Scheme is made up of three separate initiatives:

• The First Home Guarantee, which allows eligible first home buyers to purchase a home with a deposit of as little as five percent.
• The Family Home Guarantee, which allows eligible single parents to purchase a home with a deposit of as little as two percent, regardless of whether they’re a first home buyer or not.
• The Regional First Home Buyer Guarantee, which allows eligible first home buyers to purchase homes in regional areas with a deposit of as little as five percent.

Applications for one of these schemes can only be made through a participating lender or a mortgage broker acting as an authorised representative of a participating lender.

Yes, you can switch your home loan to Bank of Melbourne from another bank by refinancing. Borrowers refinancing their loan with Bank of Melbourne can choose either a fixed or standard variable rate to switch to and can add an offset account to eligible loans.

Bank of Melbourne also offers FASTRefi, which can cut the time required for settlement down to a matter of days for eligible borrowers.

Bank of Melbourne advises that they require a borrower to take out lenders mortgage insurance (LMI) if the borrower’s deposit represents less than 20% of the total loan value, and that there may be other lending circumstances in which LMI is required.

Bank of Melbourne allows borrowers to either pay their LMI upfront or roll it into their home loan amount (also known as capitalising your LMI).

As of May 2024, Bank of Melbourne charges the following fees across its range of home loans:

• Lending Establishment Fee ($600)
• Document Processing Fee ($100)
• Fixed Rate – Lock-In Fee (The higher of 0.15% of the loan amount or $500)
• Annual Package Fee ($395)
• Loan Account Fee ($8 per month)
• Loan Discharge Fee ($350)
• Missed Payment Fee ($15)

Please note that not every fee listed will be applicable to every home loan offered by the Bank of Melbourne. Check the Key Fact Sheet of any home loan product you’re looking at to see what fees you’d pay if you took out the loan in question.