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Bank of Melbourne Basic Loan

Features

The Basic Home Loan from Bank of Melbourne can be taken out as either a principle and interest (P&I) loan, or as an interest-only loan. Interest-only loans may appeal you’re buying or building investment property. The loan can also be used to purchase land for construction.

Both versions of the loan come packaged with a Bank of Melbourne transaction account.

Basic Loan – P&I:

This version of the Basic Loan does not charge you any monthly fees if you make your repayments from your linked Complete Freedom account. There is also no loan establishment fee.

You have the option to make your repayments weekly, fortnightly or monthly, and your loan term can run for up to 30 years. You have the additional benefit of being able to make extra repayments at no extra cost. This can save you thousands in interest over time. It can also shorten the length of your loan. You can redraw your additional funds,  but you will pay fees to do so.

The Basic Loan also allows you to take a repayment pause for major life events like maternity leave. Note that you will incur fees for using this facility.

The Basic Loan from Bank of Melbourne also offers you a family guarantee option, whereby a family member can guarantor a portion of your loan deposit in order to circumvent the need for you to pay mortgage insurance. You will need a 20 per cent deposit or more in total – that is, including your family member’s contribution – (or the equivalent in equity) in order to make this work.

Basic Loan – Interest Only

The interest-only version of Bank of Melbourne’s Basic Loan can only be taken out for a maximum of five years if you are an owner-occupier and for up to 15 years if you’re an investor.

The discounted interest rate still applies to the interest-only loan. You still have the option to make additional repayments at no cost – and to redraw these monies if you require although there may be some fees attached to the redraw facility. Repayments on the interest-only loan can only be made monthly.

Who is the Bank of Melbourne Basic Loan good for?

Bank of Melbourne’s Basic Loan could be good if you are looking for a simple standard variable rate loan, with a competitively low interest rate and the option to make extra repayments when and if you can.

It may be a good option for first home buyers, and also for investors as the lender is not charging a higher interest rate for using this loan to purchase an investment property or land.

Review - What RateCity says

There’s no doubt that Bank of Melbourne’s Basic Loan offers a low interest rate, which is one of the stand-out benefits.

If you’re looking to build, renovate or purchase an existing investment property the Basic Loan may also work. There is no additional interest rate loading for investors and the interest-only version of the loan could help you manage a construction project or investment property from a budgeting perspective.

If you are not located in close proximity to the branch network in Victoria though, you may want to consider whether or not this could be a problem for you.

Bank of Melbourne Basic Loan Options

The Bank of Melbourne Basic Loan is a simple, variable loan option with a competitively low rate. 

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Variable Rates from

3.64%

Advertised rate

3.65%

Comparison rate
Pros
  • Early repayments and redraws allowed.
  • Very low variable interest rates available.
  • Interest-only option.
Cons
  • Must set up a transaction account with this lender.
  • Entry and exit fees.
  • No 100 per cent offset account.
Eligibility

Must meet minimum borrowing amount.

Must meet serviceability criteria.

Must be over 18 years of age.

Suitable For
  • First Home Buyers
  • Owner-Occupiers
  • Refinancers
  • Investors
Fees
  • Estimated upfront fees: $264.00 - $764.00
  • Discharge fees: $350
  • Ongoing fees: $0

Most of the upfront fees for the Bank of Melbourne’s Basic Loan are waived if you are borrowing over a certain amount, which means you will not have to pay the moderate loan establishment fee – though, you will have to pay a relatively high discharge fee regardless.

Provided your loan repayments are made from your linked Bank of Melbourne Complete Freedom transaction account, you can avoid paying monthly transaction fees too.

Features
  • Redraw facility
  • 100% offset account
  • Unlimited extra repayments
  • Weekly repayments
  • Fortnightly repayments
  • Monthly repayments
  • Loan allows split interest rate
About Bank of Melbourne

Bank of Melbourne is a lending institution local to Victoria. With branches located in Victoria, the bank also has a 24/7 online banking website, and dedicated phone banking system. Their call centre is located in Melbourne and the bank’s customers have access to Westpac’s ATM network.

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