Bank of Melbourne Loan Guide

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Bank of Melbourne calls itself Victoria’s local bank—it has over 100 branches across the state and operates exclusively in Victoria.

Bank of Melbourne calls itself Victoria’s local bank—it has over 100 branches across the state and operates exclusively in Victoria.

Bank of Melbourne offers a range of financial products and services, including home loans, banking, and superannuation. It is the only bank that was established in Melbourne and works to give back to the local economy by supporting local charities and programs.

Bank of Melbourne was launched in Victoria in August 2011. All St.George bank branches in Victoria were converted to Bank of Melbourne at the time of establishment.

It is part of the largest regional banking network in Australia, along with Westpac, St.George and BankSA. Customers can use ATMS and branches for all three of these banks interchangeably.


 

Awards

Bank of Melbourne has won awards for its services, including:


2015 Best Local Bank in Australia, Financial Review Smart Investor Blue Ribbon Awards


2011 Best Cash Management – Business Bank, Australian Banking & Finance Corporate and Business Banking Award

Bank of Melbourne has a suite of seven loan products in two categories: standard home loans and specialist home loans.

Standard Home Loans

Bank of Melbourne offers a range of standard loan products designed to reflect borrowers’ varied circumstances.

Basic Home Loan

The Basic Home Loan is good for first home buyers and borrowers who aren’t concerned about having complex features they aren’t likely to use anyway. This loan has a lower variable interest rate and no monthly fees.

Features include:

  • Make extra repayments with no fee
  • $0 monthly service fee and $0 establishment fee (terms and conditions apply)
  • Redraw facility (fees apply)
  • Owner occupier rates of 3.64% p.a.
  • Residential investment rates of 4.19% p.a.
Standard Variable Rate Home Loan

This is a flexible home loan with a solid list of features to help borrowers pay down their loan sooner. Package with the Bank of Melbourne Advantage Package for extra discounts and relief from fees. This loan can also be split into fixed and variable rate components.

Features include:

  • Unlimited additional repayments
  • Full offset account
  • Redraw excess funds
  • Owner occupier rates of 4.45% p.a. (with Advantage Package)
  • Investor rates of 5.03% p.a. (with Advantage Package)
Fixed Rate Home Loan

The fixed rate home loan is good for borrowers who want to know exactly what their repayments will be so they can budget accordingly. This loan is less flexible, but advantageous if you are able to secure a low fixed rate.

Features include:

  • Fixed rate interest term from 1 to 5 years
  • Pay interest in advance on investment loans for a 0.2% p.a. rate discount (terms and conditions apply)
  • Rate lock option – for a fee, you can lock in a fixed rate when you apply so it can’t go up before settlement
  • New owner occupier rates of 3.85% p.a. (3 year fixed term with Advantage Package)
  • New residential investment rates of 3.99% p.a. (2 year fixed term with Advantage Package)
Portfolio Loan

This is a line of credit loan that lets you access the equity in your home for other purposes. Borrowers frequently use these funds to buy an investment property or renovate an existing property.

Features include:

  • Fixed rate interest term
  • Up to 10 sub-accounts to help keep your finances separate
  • No set repayment term
  • Residential investment rates of 5.69% (with Advantage Package)

Specialist Home Loans

These home loans were developed to address a specific set of needs, such as purchasing a new construction or using superannuation funds to buy a new home.

Building Loan

This loan is for borrowers building a new home, designed to help you save on interest as your home is constructed.

Features include:

  • Draw down funds from the loan as they are required, so you only pay interest on the amount you have used.
  • Interest-only repayments until construction is complete and the loan is fully drawn down.
  • Schedule progress payments so the builder is paid correctly and on time.
Relocation Loan

Relocation loans are for those who are trying to sell their home and build a new home at the same time. It can be tricky to get the timing right, so this loan helps relieve some of the logistical stress.

Features include:

  • Live in your current home while your new home is being built
  • 100% offset facility available
  • Flexible loan options to suit your needs: repay the loan in full when you sell your current home or combine a relocation loan with a new home loan
  • Owner occupier variable rate of 5.79% p.a.
  • Investor variable rate of 6.32% p.a.
Super Fund Home Loan

If you have a Self Managed Super Fund (SMSF), it can be used to buy a residential investment property. Eligible borrowers must have an SMSF with a minimum of $200,000 on application.

Features include:

  • Loan amounts of $100,000 to $2,000,000
  • Full offset facility available
  • Pay interest in advance on fixed rate loans
  • Interest rates of 6.35% p.a.

Bank of Melbourne home loans offer a comprehensive list of features. The features available to you will depend on the home loan type you choose, but may include:

  • Offset account: Save on interest by offsetting the principal against the amount in a linked transaction account
  • Unlimited additional repayments on variable interest rate loans
  • Redraw facility: Redraw funds from extra repayments
  • Flexible repayments: Choose from weekly, fortnightly, or monthly repayments
  • Family pledge: Use equity in a family member’s home to avoid Lenders Mortgage Insurance (LMI)
  • Package with a Bank of Melbourne Advantage Package ($395/year) for discounts on interest rates and fees
  • Pause or reduce repayments for a set period of time (terms and conditions apply)
  • Split your loan between fixed and variable interest rates
  • Pay interest in advance and pay a reduced interest rate on the advance payment period

Bank of Melbourne home loans cover the standard range of home loan types. You can choose between variable, fixed, or split-rate home loans. Fixed interest rates can be fixed for 1 to 5 years.

For repayment structures, interest-only repayments and principal + interest repayments are available. With interest-only repayments, interest is calculated daily and charged monthly.

Bank of Melbourne encourages interested borrowers to apply online for a home loan. This option is for applicants who meet the following requirements:

  • Over 18
  • Australian permanent resident
  • Refinancing and new loan applicants

You’ll need to provide the following information:

  • Name and contact details for borrowers
  • Information on income and expenses
  • Details of any existing properties and liabilities

It takes ten minutes to receive indicative approval and learn how much you can borrow. From there, a home loan expert will call to discuss your options. At that stage, Bank of Melbourne will do the following before progressing to the conditional approval stage:

  • Assess the suitability of the loan
  • Verify your information
  • Check your credit history

If you prefer not to apply online, you can also submit an online enquiry, call 13 22 66, or visit a branch.

Yes. Extra repayments can be redrawn for eligible home loans. Borrowers can register for redraw online or through phone banking, then simply transfer funds into a preferred account.

Borrowers who do not wish to register for redraw can complete the Home Loan Redraw Form, which is available for download on the Bank of Melbourne website.

Yes. You can make unlimited extra repayments on eligible variable rate home loans, and extra repayments of up to $10,000 on fixed rate home loans without incurring additional fees.

However, be aware that there may be break fees or a penalty charged for paying your home loan out early. Depending on the home loan, it may be a flat fee or a percentage of your loan amount. Check the home loan documentation for specific details.

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