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About Bank of Melbourne

Founded in July 1989, the Bank of Melbourne initially offered retail banking services and residential property lending, and acquired Challenge Bank in 1996. In 1997, Westpac successfully acquired the Bank of Melbourne, shuttered the brand in January 2004, and then launched it again in 2011 as a Westpac subsidiary.

Bank of Melbourne currently offers personal banking, home loans, credit cards, personal loans and foreign exchange solutions, as well as investment and retirement options.

Bank of Melbourne home loans at a glance

Offset accounts available
Redraw facilities available
Line of credit available
Split rate option available
Green loan available
Ability to make extra repayments
Internet banking available
Salary crediting
Choice of repayment flexibility
Refinance available
Services first home buyers

What types of home loans does Bank of Melbourne offer?

Bank of Melbourne’s range of home loan products on offer currently includes:

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Who does Bank of Melbourne lend to?

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.

Can I get a Bank of Melbourne home loan as a first home buyer?

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.

Does Bank of Melbourne offer the Home Guarantee Scheme?

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.

Can you refinance your home loan with Bank of Melbourne?

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.

Does Bank of Melbourne charge Lenders Mortgage Insurance (LMI)?

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).

What home loan fees does Bank of Melbourne charge?

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.

Interested in a Bank of Melbourne home loan? Compare with us today!

If you want to learn more about Bank of Melbourne home loans, you can use our home loan comparison tool to compare them against a wide range of other loan products from nearly 20 other lenders!

Comparing home loans with us means only being shown home loans you’re eligible to apply for, and having a dedicated team of Home Loan Specialists on-hand to help you with any questions you may have. And if you find a home loan that you think might be appropriate for you, you can apply for it then and there – entirely online, with no physical paperwork.

So, if you’re in the market for a home loan, compare your options today with Compare the Market.

Stephen Zeller, Home Loans Expert

Meet our home loans expert, Stephen Zeller

Stephen has more than 30 years of experience in the financial services industry and holds a Certificate IV in Finance and Mortgage Broking. He’s also a member of both the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the Mortgage and Finance Association of Australia (MFAA).

Stephen leads our team of Home Loan Specialists, and reviews and contributes to Compare the Market’s banking-relating content to ensure it’s as helpful and empowering as possible for our readers.

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