Top tips to prepare your first home loan application

What first home buyers in Sandringham need before applying

You need genuine savings for your deposit, proof of income, and a clear sense of what you can borrow before you start applying for a home loan.

Most lenders want to see three months of statements showing regular income and spending patterns, plus evidence that your deposit has been saved over at least three months. If part of your deposit is a gift from family, that usually requires a signed declaration confirming it's not a loan. Your employment status matters too. If you're on a casual contract or recently changed jobs, some lenders will want extra documentation. Knowing your borrowing capacity early on means you can search for properties within your range rather than falling for something you can't finance.

Sandringham sits in the City of Bayside, an area where median prices have consistently run higher than outer suburbs but still draw plenty of first home buyers because of proximity to the bay, schools and public transport. That combination means you'll be competing with people who have larger deposits or dual incomes, so walking into the application process with paperwork sorted and a firm understanding of what you qualify for makes a tangible difference.

Stamp duty concessions and how they apply in Victoria

Victoria offers a full stamp duty exemption on properties up to $600,000 and a partial concession on properties between $600,001 and $750,000 for eligible first home buyers.

If you're buying an established home in Sandringham at the lower end of the local price range, the concession can save you tens of thousands of dollars in upfront costs. Consider a buyer purchasing an older unit close to the station valued at $580,000. They pay no transfer duty at all. A buyer purchasing a townhouse at $680,000 pays a reduced rate rather than the full amount, which can still save around $20,000 compared to someone who isn't a first home buyer.

The concession applies to both new and established homes as long as you're moving in as your principal place of residence. You can't claim it if you've owned property before, and all buyers on the title need to meet the eligibility criteria. The exemption doesn't extend beyond $750,000, so if you're looking at properties above that threshold, you'll pay standard duty rates.

The Australian Government 5% Deposit Scheme and how it works

The Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with just a 5% deposit and no lenders mortgage insurance.

Housing Australia guarantees the difference between your deposit and 20% of the property value, which removes the LMI cost that would otherwise apply when you borrow more than 80% of the purchase price. In Melbourne, the property price cap is $950,000. Applications are made through participating lenders, not directly through Housing Australia, and there are no income caps or annual limits on the number of places available.

In our experience, buyers in Sandringham who have been renting and saving simultaneously find this scheme particularly useful. It means you can enter the market sooner without waiting years to build a 20% deposit. A buyer with a 5% deposit still needs to cover stamp duty and settlement costs on top of the deposit itself, so the total upfront cash requirement is higher than the deposit alone, but avoiding LMI can reduce costs by tens of thousands of dollars depending on the loan amount.

First Home Owner Grant eligibility in Victoria

Victoria's First Home Owner Grant pays $10,000 for new homes valued up to $750,000, but it does not apply to established homes.

If you're buying an apartment off the plan near Bay Road or considering a new townhouse development, you may be eligible. The property must be new or substantially renovated, and you need to move in within 12 months of settlement and live there continuously for at least 12 months. The grant is paid after settlement, so it doesn't directly increase your deposit, but it can be factored into your overall budget or used to cover furniture, moving costs or early mortgage payments.

Most buyers in Sandringham are purchasing established homes because the suburb is largely built out, so the grant won't apply to the majority of transactions here. If you're comparing a new build in a neighbouring area against an established home in Sandringham, the grant can tip the financial balance, but it shouldn't be the only factor in your decision.

How to show genuine savings when applying for a home loan

Genuine savings are funds you've accumulated over at least three months in your own account, excluding one-off windfalls like tax refunds or bonuses in most cases.

Lenders look at your transaction history to confirm you can manage money consistently. Regular deposits from your salary into a savings account, term deposit or offset account all count. If you've been living at home and banking a large portion of your income each month, that's typically viewed favourably. If a relative is gifting you part of the deposit, that's generally accepted, but the lender will want a statutory declaration confirming it's not a loan that needs to be repaid.

Consider a buyer who has saved $30,000 over 18 months while renting in Mentone, with clear payslip records and regular transfers into a high-interest account. That's a strong savings history. Compare that to someone who received $30,000 from the sale of a car two weeks before applying. The second scenario might still be acceptable depending on the lender, but it's a weaker position and may limit your options or affect the interest rate you're offered.

Fixed versus variable rates and what suits first home buyers

A variable rate moves with the market, while a fixed rate locks in your repayment amount for a set period, typically between one and five years.

Most first home buyers we work with want certainty in the early years, especially if their budget is tight. A fixed rate means you know exactly what you'll pay each month, which makes household planning easier. The trade-off is that you usually can't make extra repayments beyond a small annual threshold without incurring break fees, and you often miss out on features like an offset account during the fixed period.

Variable rates give you flexibility to pay extra whenever you have spare cash, and you can link an offset account to reduce the interest charged each month. If rates drop, your repayments drop too. If they rise, your repayments increase. Some buyers split their loan, fixing part for stability and leaving part variable for flexibility. There's no single right answer, but your decision should be based on your income stability, how much buffer you have in your budget, and whether you're likely to receive windfalls like bonuses or gifts that you'd want to put toward the loan.

Pre-approval and why it matters when you're ready to buy

Pre-approval is a conditional agreement from a lender confirming how much they're willing to lend you, subject to property valuation and final checks.

It's usually valid for three to six months and gives you confidence when you're attending open inspections or making an offer. In areas like Sandringham where stock can move quickly, especially for well-presented homes close to the beach or station, turning up to an auction or private sale without knowing what you can borrow puts you at a disadvantage. Sellers and agents take you more seriously when you can demonstrate that finance is already in place, and you're less likely to waste time on properties outside your range.

Pre-approval isn't a guarantee. If your financial situation changes, or if the property you choose is valued below the purchase price, the lender can withdraw or adjust the offer. But it's still the most useful step you can take once you've got your deposit and documents sorted. It turns browsing into genuine buying, and it gives you a clear boundary for your search.

Offset accounts, redraw facilities and how they reduce interest

An offset account is a transaction account linked to your home loan. The balance in the offset reduces the amount of interest you're charged each month.

If you have a $500,000 loan and $20,000 sitting in a full offset account, you only pay interest on $480,000. The money in the offset is still accessible whenever you need it, so it works as both a savings buffer and an interest reduction tool. Redraw lets you access extra repayments you've made on the loan itself, but the funds aren't as instantly available as they are in an offset, and some lenders charge fees or impose delays.

For first home buyers, an offset account makes sense if you're disciplined about keeping your salary and savings in that account rather than spending it. If you're the type of person who sees money in the account and feels the urge to spend it, redraw might be a safer option because the money is less visible. Either way, both features only work if you're actually putting extra money aside. If your budget is stretched to the limit each month, neither will deliver much value in the short term.

Settlement costs beyond the deposit

You need to budget for conveyancing, building and pest inspections, lender fees, and sometimes mortgage registration or title search costs on top of your deposit and stamp duty.

Conveyancing typically costs between $1,200 and $2,500 depending on the complexity of the transaction and the firm you use. Building and pest inspections usually run $500 to $800 combined. Some lenders charge application or valuation fees, though many have removed these in recent years. You might also need to pay for a property report, mortgage registration with the state, or insurance from settlement day.

These costs add up quickly, and they're often overlooked by buyers focussing only on the deposit figure. If you're applying under the 5% Deposit Scheme with a smaller deposit, your cash buffer after settlement can be thin, so knowing the full cost upfront means you're not scrambling in the final weeks before settlement.

Call one of our team or book an appointment at a time that works for you. We'll go through your situation, work out what you're eligible for, and make sure your application is set up properly from the start.

Frequently Asked Questions