Start with a realistic deposit target
Most lenders expect a minimum 20% deposit to avoid paying Lenders Mortgage Insurance, though you can borrow with less. If you're purchasing your next home in Murrumbeena, building a 20% deposit gives you access to lower rates and more flexible loan products.
Consider a buyer moving from a smaller unit in the area to a family home. If they're selling a property they've held for several years, the equity built in that property becomes the core of their deposit. When equity from the sale covers or exceeds 20% of the new purchase, LMI doesn't apply and the buyer keeps more room in the budget for settlement costs and any property improvements.
If your deposit sits below 20%, you'll need to factor LMI into your upfront costs. The premium is calculated on a sliding scale based on your loan amount and loan-to-value ratio. In some cases, capitalising the LMI premium into the loan can make sense if it means securing the property sooner, particularly in a suburb where stock moves quickly.
Know what Murrumbeena buyers are working with
Murrumbeena attracts upsizers, downsizers and families prioritising school zones and public transport access. The suburb sits within the Glen Eira local government area and is serviced by Murrumbeena station on the Frankston and Cranbourne-Pakenham lines, making the commute to the city under 20 minutes.
Property types range from interwar and post-war homes on established blocks through to newer townhouses and apartment developments near the station precinct. Buyers in the area regularly weigh up whether to purchase an older home with renovation potential or a more recently built property that's move-in ready. Each choice brings different lending considerations, including valuation approaches and the availability of offset accounts or redraw facilities on certain loan products.
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Use pre-approval to set your budget and move faster
Pre-approval confirms how much a lender is willing to lend before you make an offer. It's valid for three to six months depending on the lender and gives you clarity around your budget when you start viewing properties.
In our experience, buyers with pre-approval in hand can act quickly when the right property comes up. Murrumbeena has a mix of on-market and off-market sales, and sellers often prefer buyers who've already secured finance approval, particularly in a conditional sale environment where timing matters.
Pre-approval isn't a guarantee. Final approval depends on a satisfactory property valuation, updated financial checks and the completion of any outstanding conditions. Still, it's the closest you'll get to certainty before you sign a contract, and it removes one layer of uncertainty from the purchase process.
Compare variable, fixed and split loan structures
Variable rate home loans move with the market. Your repayments can go up or down depending on rate changes, and you usually have access to features like offset accounts, unlimited extra repayments and redraw facilities.
Fixed rate home loans lock in your interest rate for a set period, typically one to five years. Your repayments stay the same during that period, which can help with budgeting if you're managing school fees, childcare or other fixed household costs. The trade-off is reduced flexibility during the fixed term.
A split loan divides your loan between fixed and variable portions. You get rate certainty on part of the loan and flexibility on the rest. It's a middle path that suits buyers who want some protection from rate rises without locking in the full loan amount.
Make your offset account work from day one
An offset account is a transaction account linked to your home loan. The balance in the offset account reduces the amount of interest you're charged on the loan, without restricting access to your funds.
Consider a buyer who's just settled on a Murrumbeena townhouse with a $600,000 loan and keeps $30,000 in their offset account. They're only charged interest on $570,000, even though the full loan amount is $600,000. Over time, that reduction in interest can shave years off the loan term or free up funds for other priorities.
Offset accounts work well if you maintain a healthy cash buffer for emergencies, irregular income or planned expenses like school trips or family holidays. If your savings balance tends to sit close to zero, the benefit is limited and you might be paying an annual fee for a feature you're not using.
Understand how lenders assess your borrowing capacity
Lenders calculate how much they're willing to lend based on your income, expenses, existing debts and the loan structure you're applying for. APRA requires all authorised deposit-taking institutions to assess your ability to service the loan at an interest rate that's at least 3.0 percentage points above the actual loan product rate.
From 1 February 2026, lenders also operate under debt-to-income lending limits. Each lender can lend up to 20% of new owner-occupier loans to borrowers with a total debt-to-income ratio of six times or greater. If your total borrowing sits at or above that threshold, your application will be part of a limited pool and the lender may apply additional scrutiny or decline the application if their quarterly allocation is already filled.
These settings apply to new lending only and don't affect your current loan. If you're refinancing or purchasing your next home, the assessment is based on your circumstances at the time of application.
Decide between principal and interest or interest-only repayments
Principal and interest repayments reduce your loan balance over time. Each repayment covers the interest charged for that period plus a portion of the principal, building equity in the property from day one.
Interest-only repayments cover the interest charged each period without reducing the principal. Monthly repayments are lower during the interest-only period, which can help with cash flow if you're managing multiple financial commitments. At the end of the interest-only period, the loan reverts to principal and interest repayments and the repayment amount increases.
Interest-only loans are more common for investment properties, but they're also available for owner-occupied lending in some cases. If you're purchasing your next home and planning significant renovations, an interest-only period can give you breathing room while the work is underway, then switch to principal and interest repayments once you're settled.
Look beyond the advertised rate
The interest rate is part of the picture, but it's not the whole story. Loan features, fees and flexibility matter just as much, depending on what you're trying to achieve.
Some lenders offer lower advertised rates but charge higher upfront or ongoing fees, or restrict access to features like offset accounts or extra repayments. Others build flexibility into the loan product but price the rate slightly higher to reflect that.
A portable loan allows you to transfer your existing loan to a new property without refinancing, which can save on discharge and application fees if you're planning to move again in the next few years. Redraw facilities let you access extra repayments you've made on the loan, though some lenders charge a fee or place limits on how often you can redraw.
Factor in upfront and ongoing costs
Application fees, valuation fees, settlement fees and legal costs all form part of the upfront expense when you take out a home loan. Some lenders waive application fees as part of a package discount, while others charge between $200 and $600.
Ongoing fees include annual package fees, offset account fees and monthly account-keeping fees. If you're taking out a loan with a package that includes rate discounts and fee waivers, the annual package fee typically ranges from $300 to $400 but can be offset by the rate discount and included features.
Stamp duty is the largest upfront cost for most Victorian buyers. First home buyers purchasing in Victoria can access a full stamp duty exemption on properties valued up to $600,000, with a sliding scale concession on properties valued between $600,001 and $750,000. If you've owned property before, standard duty rates apply and the cost can run into tens of thousands depending on the purchase price.
Work with a broker who knows the lending panel
Mortgage brokers compare loan products across multiple lenders and help match your circumstances to the most suitable options. Brokers have access to loan products and rates that aren't always advertised directly to the public, and they manage the application process from start to finish.
We regularly see buyers who assume they're limited to their existing bank or the lender their parents used, without realising how much variation exists across the market in rate discounts, loan features and serviceability treatment. A broker can also identify which lenders are more flexible with certain income types, employment structures or deposit sources, which matters if your circumstances don't fit a standard lending profile.
Brokers are paid by the lender, not the borrower, in most cases. You're not paying a fee for the service, and you're getting access to a broader range of options than you'd find by approaching a single lender directly.
Prepare your documents and keep your finances steady
Lenders require proof of income, proof of savings, identification and details of your assets and liabilities. For employed buyers, that typically means recent payslips, tax returns and bank statements. For self-employed buyers, lenders usually ask for two years of tax returns, business financials and accountant-prepared statements.
Once you've submitted your application, avoid making large purchases, opening new credit accounts or changing jobs until settlement is complete. Lenders can and do recheck your financial position before final approval, and any material change can delay or derail the application.
Keep your bank statements clean in the months leading up to your application. Lenders review transaction history for evidence of consistent savings behaviour, undisclosed liabilities and spending patterns that might affect serviceability. Regular deposits, minimal reliance on credit and a clear explanation for any one-off transactions all work in your favour.
Call one of our team or book an appointment at a time that works for you. We'll walk through your situation, compare your options and help you put together a loan structure that fits your next move in Murrumbeena.
Frequently Asked Questions
How much deposit do I need to buy my next home in Murrumbeena?
Most lenders expect a minimum 20% deposit to avoid paying Lenders Mortgage Insurance. You can borrow with a smaller deposit, but you'll need to factor LMI into your upfront costs. If you're selling an existing property, the equity from that sale often forms the core of your deposit.
What's the difference between a variable and fixed rate home loan?
Variable rate loans move with the market and typically offer features like offset accounts and unlimited extra repayments. Fixed rate loans lock in your interest rate for a set period, keeping repayments steady but reducing flexibility. A split loan combines both structures.
How do lenders calculate how much I can borrow?
Lenders assess your income, expenses, existing debts and the loan structure you're applying for. They must assess your ability to service the loan at an interest rate at least 3.0 percentage points above the actual loan rate. From February 2026, debt-to-income limits also apply to new lending.
What is an offset account and how does it work?
An offset account is a transaction account linked to your home loan. The balance in the account reduces the amount of interest you're charged on the loan, without restricting access to your funds. It works well if you maintain a healthy cash buffer.
Should I get pre-approval before looking at properties?
Pre-approval confirms how much a lender is willing to lend before you make an offer and is valid for three to six months. It gives you clarity around your budget and helps you move quickly when the right property comes up, particularly in a suburb where stock moves fast.
