What Not to Miss: First Home Buyer Checklist for Malvern

What You Need Before You Start Looking

Your deposit, income documentation, and borrowing capacity are the three pieces that determine what you can afford and what lenders will approve. Get clarity on these before you attend your first open for inspection, otherwise you risk falling for a property you can't finance.

Most lenders require a 5% to 10% deposit for first home buyers, but the Australian Government 5% Deposit Scheme removes the need for lenders mortgage insurance if you meet the eligibility criteria. The scheme applies through a panel of 31 lenders and has no income cap, which makes it accessible to a broader range of buyers. The property price cap for Melbourne is $950,000, which covers much of the established housing stock in Malvern.

Consider a buyer earning $95,000 annually who has saved $55,000. Under the 5% Deposit Scheme, they could purchase a unit close to the Malvern or Glenferrie train stations without paying lenders mortgage insurance. That same buyer would need closer to $95,000 in savings to avoid LMI under a standard loan product. The difference is either several more years of saving or access to the market now.

Your borrowing capacity depends on your gross income, existing debts, living expenses, and the lender's assessment rate. Two buyers with identical incomes can have different capacities based on whether they have a car loan, a credit card limit, or regular buy-now-pay-later commitments. Before you shortlist properties, get a clear figure from a mortgage broker on what you can borrow. You can learn more about how this calculation works on our borrowing capacity page.

Documents Lenders Will Ask For

Lenders assess your application based on your ability to service the loan and your savings history. You'll need to provide recent payslips, tax returns if you're self-employed, bank statements showing at least three months of savings, and proof of your deposit source. If part of your deposit is a gift from a family member, the lender will require a signed statutory declaration confirming the funds are not a loan.

Genuine savings are funds you've accumulated over at least three months in your own account. Sale proceeds from shares, a tax refund, or a work bonus can sometimes be counted, but policies vary by lender. If your deposit includes a first home owner grant, most lenders will accept that alongside your saved funds when calculating your total deposit.

Stamp Duty Concessions in Victoria

Victoria offers a full stamp duty exemption on properties up to $600,000 and a sliding concession on properties between $600,001 and $750,000 for eligible first home buyers. Above $750,000, standard stamp duty rates apply. This concession applies to both new and established homes, provided the property will be your principal place of residence.

In Malvern, where the median unit price sits comfortably within the concession range, this can save you between $15,000 and $30,000 in upfront costs. The saving is immediately material because it frees up cash you would otherwise need to bring to settlement. On a $650,000 apartment, the concession saves approximately $26,000 in duty, which can instead go toward furniture, moving costs, or retaining a buffer in your offset account after settlement.

The First Home Owner Grant in Victoria is $10,000, but it applies only to new homes valued up to $750,000. If you're purchasing an established apartment or townhouse in Malvern, you won't qualify for the grant, but the stamp duty concession still applies and delivers a larger financial benefit in most cases.

Pre-Approval and What It Actually Covers

Pre-approval gives you written confirmation from a lender that they're willing to lend you a specific amount, subject to property valuation and final checks. It's valid for three to six months depending on the lender and gives you confidence to make an offer when you find the right property.

Pre-approval is not a guarantee. If your financial circumstances change between pre-approval and settlement, or if the property you're purchasing is valued below the contract price, the lender can withdraw or reduce the offer. That said, pre-approval is still the most useful tool you have when attending auctions or negotiating in a competitive market. Vendors and agents take you more seriously when you can demonstrate that a lender has already assessed your application.

When applying for pre-approval, your broker will submit your income documents, savings evidence, and identification to the lender. The lender runs a credit check, assesses your capacity, and issues conditional approval. That approval is conditional on you finding a property that meets their lending criteria and on nothing material changing in your finances before settlement. You can begin this process with a home loan application through a broker who understands the specific lender policies that apply to first home buyers.

Fixed or Variable Rate for Your First Loan

Your interest rate structure affects your repayments, your flexibility, and your ability to make extra repayments without penalty. A variable interest rate moves with the market, which means your repayments can increase or decrease over time. Most variable loans come with an offset account and unlimited additional repayments, which gives you flexibility if your income increases or you receive a lump sum.

A fixed interest rate locks in your repayment amount for a set period, typically between one and five years. You gain certainty over your budget, but you also lose flexibility. Most fixed loans restrict extra repayments to a capped amount each year and charge break costs if you refinance or sell before the fixed term ends.

Some buyers split their loan, fixing part of the balance and leaving the rest on a variable rate. In a scenario where a buyer in Malvern borrows $550,000, they might fix $350,000 for three years and keep $200,000 variable with an offset account. This structure provides partial protection against rate rises while maintaining access to redraw or offset features on the variable portion. Your broker can model different splits based on your income stability and your plans for the property over the next few years.

What Happens Between Offer and Settlement

Once your offer is accepted, you'll exchange contracts and pay a deposit, usually 10% of the purchase price. The contract becomes binding at this point, and the settlement period begins. Settlement typically occurs 30 to 90 days after exchange, depending on what was negotiated.

During this period, your lender will order a valuation of the property. The valuer inspects the property and provides the lender with an assessment of its market value. If the valuation comes in below the purchase price, the lender will only provide a loan based on the lower figure, which means you'll need to make up the difference with additional savings or renegotiate the contract.

Your broker coordinates with your solicitor or conveyancer to ensure the lender receives all necessary documents before settlement. The lender prepares the mortgage documents, which you'll sign before settlement day. On settlement day, your lender transfers the loan funds to the vendor's solicitor, and you receive the keys. The entire process requires coordination between your broker, your solicitor, the lender, and the selling agent, which is why using professionals who understand the timing is important.

Applying Through a Broker or Going Direct

You can apply for a loan directly with a bank or through a mortgage broker. Going direct limits you to that lender's products and interest rate discounts. A broker compares loan options across multiple lenders, identifies which ones are most likely to approve your application, and often secures access to interest rate discounts that aren't available to retail customers.

Brokers are paid by the lender, not by you, which means the service is provided at no cost in most cases. The value lies in the comparison, the experience with credit policy, and the management of the application from pre-approval through to settlement. For first home buyers in Malvern who may not have prior experience with loan structures, LMI waivers, or government schemes, the guidance can be the difference between approval and decline, or between a suitable loan and one that doesn't fit your circumstances.

We work with buyers across the Malvern area, from those purchasing near the Central Park precinct to those looking closer to Wattletree Road or the Malvern Central shopping precinct. The properties vary, but the process and the questions are consistent. If you'd like to talk through your specific situation, call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions