Melbourne home loans
Looking to buy a property in Melbourne? Compare from a range of eligible Melbourne home loans today!
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Different types of home loans you can get in Melbourne
If you want to buy property in Melbourne, it’s important to understand which type of home loan products may be well suited to your financial circumstances and needs:
Top 3 things to know about getting a home loan in Melbourne
2
Make sure you’ve got good help
You’ll probably need the help of a conveyancer and/or a solicitor when buying a property in Melbourne, but make sure you find a good mortgage broker first! Our team of expert brokers is ready to answer any questions you may have, or to help you start your home loan journey.
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Understand what you want in a loan
Think long and hard about what type of home loan you might want, and what kind of home loan features might benefit you. Our expert brokers can talk you through the pros and cons of each loan type, and potentially help you with your decision.
Meet our dedicated team of mortgage brokers
Our Meerkat Technology makes our comparison and application process a breeze, but sometimes you just need a helping hand! Our team of brokers and home loan experts are here to bring ease and expertise, and no question is too big or small; we’re happy to help!
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A guide to Melbourne home loans
Updated 30 July 2025
An introduction to home loans
Selling Houses Australia host, Andrew Winter explains how home loans work, and covers off some basics that prospective homebuyers need to know.
Andrew Winter
Home Loans
Transcript
“Hi, I’m Andrew Winter, host of Selling Houses Australia.
I’ve sold a lot of homes in my time, but to be able to buy one in the first place,
you’ll need a home loan first.
As a matter of fact, most of us will need to take out a home loan at some point or another
if we want to buy a house.
So, what is a home loan, and how does it work?
Well, a home loan is much like any other bank loan – you borrow a certain amount of money
from your lender, and then pay it back over time
plus the interest that’s being charged on the loan, which is determined by your home loan interest rate.
But, when it comes to home loans, there’s a few things you’ll want to keep in mind.
First off, you’ll usually need a saved deposit this will ideally be a minimum of 20%
of your desired home loan size, but can be as low as 5% for certain borrowers, including
first home buyers and single parents.
That’s not to say you can’t have a 5% deposit as a regular borrower, some lenders
may still give you a home loan – they’ll just charge you lender’s mortgage insurance
in exchange, along with a higher rate to boot.
Second, the home loan is secured against the property you bought with it, which means that
you own the property at settlement, but the lender has a vested interest in your property
until the day the home loan is closed.
Before selling the home or refinancing the home loan attached to the property, you’ll
need to let your lender know – they’ll have a form for you to fill out, just ask them.
And the third – this one is absolutely crucial – comparison is key.
Just because you need a home loan to buy a home doesn’t mean you should settle for a bad one.
Compare the Market can help you learn everything you need to know about home loans, so that
you can compare with confidence.
Once you’re ready to compare, you can use their new home loan comparison tool to compare
home loans on things like rates, fees, features and more,
plus they’ve got a team of Home Loan Specialists who are always on-hand to answer any questions
you might have, and help you make an informed decision about which home loan might be suitable for your needs.
Whether you are a home loans novice or a property buying expert, Compare the Market
can help make your next homebuying journey a breeze.”
Find out more about home loans
Expert tips for buying property using a Melbourne home loan
Our General Manager of Money, Stephen Zeller, has some pieces of advice for anyone wanting to get a foot on the Melbourne property ladder:
Stephen Zeller
General Manager – Money
Consider natural disasters
With many different parts of Melbourne susceptible to flooding and bushfire, you’ll want to factor these sorts of events into your decision-making process when it comes to both the area you buy in and the property you eventually buy. It may be worth considering both liveability and long-term value when assessing these risks.
Be open-minded
If you’re a first-time property-buyer, it may be worth broadening your search to include properties or areas in Melbourne you’d previously dismissed as undesirable. When it comes to getting on the property ladder, some compromise early on can pay dividends in the long run – especially if a lower purchase price can help you lower your loan-to-value ratio (LVR) and potentially avoid paying lenders mortgage insurance (LMI).
We can help you compare your options
Our home loan comparison service lets you compare home loans you could be eligible for if you want to buy property in Melbourne. If you find a home loan you like, we can help you apply for it too. We can also help you run a free credit score check, as well as help you grab free property and suburb reports to help you make sure you’ve got all the information you need before buying.
Getting a home loan in Melbourne
Which lenders offer home loans in Melbourne?
Many Australian home loan providers will service potential borrowers located in Melbourne. Bank of Melbourne is an arm of the Westpac Group which is located in and exclusively run for Victorian residents. Conversely, BankSA will not lend to Melbourne residents, operating exclusively in South Australia.
How to apply for a home loan in Melbourne
Regardless of which Australian state of territory you live in, the home loan application process typically won’t differ much. This means applying for a home loan in Melbourne is like applying for a home loan elsewhere in Australia. Here’s an overview of the steps involved:
- Decide what you’re looking for in a new home loan by thinking about your current financial situation, your borrowing power, and what type of home loan, repayment type and loan term length could be most suitable for you. You may also want to think about what types of home loan features you might want: for example, an offset account, a redraw facility, etc.
- Pulling together the necessary documentation, including personal identification, bank statements, and payslips.
- Begin the home loan comparison process – we can help you with that by showing you a range of home loan options we think could be suitable for you based on their eligibility criteria. This will also show you the estimated weekly, fortnightly or monthly home loan repayments you’d be making towards each home loan based on your proposed loan amount and saved home loan deposit.
- Once you’ve decided on the home loan you want to apply for, we’ll help you complete and submit your application to the lender.
- If your application is successful, you’ll receive a formal loan offer and be ready to buy your Melbourne property.
Can you refinance a home loan in Melbourne?
If you’re looking to refinance your home loan in Melbourne, the process of refinancing typically doesn’t vary much from state to state, and is similar to the usual home loan application process.
Is government assistance available for Melbourne first home buyers?
If you’re buying a home for the first time in Victoria, you may be eligible for both the Victoria First Home Owner Grant and either a full exemption on your payable stamp duty exemption or a stamp duty concession, depending on the value of the property you’re buying.
As an Australian first home buyer, you may also be eligible to receive the First Home Guarantee, which makes it easier to take out a home loan as you only need to have a 5% deposit saved. The Federal Government will then guarantee an additional 15% in order to give you a 20% deposit, which will in turn help you avoid lenders mortgage insurance (LMI).3
What to know when buying a property in Melbourne
Buy the location
If you’re buying a home in Melbourne, it’s important to thoroughly research the areas and suburbs you’re thinking of buying in. Flood risk, crime rates, school catchments – these are all key factors that can affect the desirability and liveability of a suburb. Our free suburb reports can provide crucial information about suburbs you’ve got your eye on.
Remember stamp duty
Depending on the Australian state or territory you’re buying in, stamp duty (also known as transfer duty) will work differently and be charged at different rates based on the property price. It may be worth checking how stamp duty is calculated in Victoria before starting your homebuying journey.
Can foreign persons buy property in Melbourne?
Yes, you can purchase property in Melbourne as a foreign purchase, however you’ll typically have to pay an extra 8% in stamp duty on top of your base stamp duty amount. This is known as foreign purchaser additional duty (FPAD).4
What is the property market like in Melbourne?
What are home loan rates in Melbourne like?
While we don’t have Melbourne-specific data on average home loan interest rates being paid by Melbourne residents, the average interest rate for a new, owner-occupied home loan in Australia was 5.83% per the Reserve Bank of Australia (RBA) as of May 2025.5
The average interest rate for a new investment home loan in Australia was 6.02% as of May 2025.5
When comparing home loan interest rates, you’ll want to look at each home loan’s comparison rate as well – this second rate is meant to give an indication of the ‘true’ cost of the loan, after things like application fees, annual fees and ongoing fees have been taken into account.
How big is the average home loan in Melbourne?
According to the Australian Bureau of Statistics (ABS), the average owner-occupier home loan taken out in Victoria was $628,000 as of March 2025. The average mortgage size for investors in Victoria was $609,000.1
And as of July 2025, the average settled home loan amount taken out in Melbourne through Compare the Market’s online home loan service was just under $411,000 ($410,990) for refinancers, and just over $416,000 ($416,370) for new home loans since July 1 2024.
How big is the average home in Melbourne?
As of 2021-22, the average new house in Victoria had a floor area of 240.8m2 according to the ABS. This represented a 7.02% increase from 2022-03, when the average floor area of a new house in Victoria was 225m2.
What’s the average cost of a home in Melbourne?
As of April 2025, the median value of a home in Melbourne was $781,000, according to PropTrack. This came in at lower than both the national median home value of $805,000 and the capital city median home value of $873,000.7
What are the cheapest suburbs in Melbourne?
Here are Melbourne’s 10 cheapest suburbs (based on median value) for both houses and units according to CoreLogic data:8
| Lowest median house values | Lowest median unit values |
|---|---|
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What are the most expensive suburbs in Melbourne?
Based on property data from CoreLogic, here are Melbourne’s 10 suburbs with the highest median house prices and unit prices:8
| Highest median house values | Highest median unit values |
|---|---|
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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 Mortgage Brokers, and reviews and contributes to Compare the Market’s banking-related content to ensure it’s as helpful and empowering as possible for our readers.
1Australian Bureau of Statistics. Lending indicators (March Quarter 2025). 2025.
2Corelogic. Monthly Housing Chart Pack (May 2025). 2025.
3Housing Australia. First Home Guarantee. 2025.
4State Revenue Office Victoria. Foreign purchasers of property. 2025.
5Reserve Bank of Australia. Lenders’ Interest Rates (May 2025). 2025.
6Australian Bureau of Statistics. Average Floor Area of New Residential Dwellings (2023). 2025.
7PropTrack. Home Price Index (May 2025). 2025.
8CoreLogic. Mapping the Market (May 2025). 2025.