Top 10 Resources Every First Home Buyer in Kew Should Know

Buying your first home in Kew means working with one of Melbourne's most established residential markets. The resources that matter most are the ones that reduce your upfront costs and give you access to properties that might otherwise sit just outside your deposit range.

The First Home Guarantee Without Income Caps

The First Home Guarantee allows eligible buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance. From October 2025, income caps were removed entirely, which opens the scheme to a much wider group of buyers in areas like Kew where household incomes tend to sit above previous thresholds. You still need to meet standard lender serviceability tests, but the removal of the income cap means you're no longer excluded simply because you earn too much. The property price cap in Victoria is $900,000, which covers a range of units and older-style homes in Kew, though not the suburb's premium freestanding stock.

Consider a buyer who has saved $50,000 and is looking at a two-bedroom apartment near Cotham Road. With a 5% deposit, they can borrow up to $950,000 under the scheme without paying LMI, which would otherwise add between $25,000 and $35,000 to their upfront costs. That saving can be redirected into conveyancing, building inspections, or simply held as a buffer after settlement.

Victoria's Stamp Duty Concession for First Home Buyers

Victoria offers full stamp duty exemption on properties up to $600,000 and a sliding concession up to $750,000 for eligible first home buyers. In Kew, this applies most commonly to apartments and units rather than houses. A property purchased for $650,000 would normally attract around $34,000 in stamp duty, but under the concession, that figure drops to roughly $11,000. The concession tapers off completely at $750,000, so buyers at that price point need to factor in around $40,000 in duty.

The concession applies to both new and established homes, which gives you flexibility across Kew's mix of heritage homes, renovated Edwardian units, and newer apartment developments near High Street. You must be a natural person, an Australian citizen or permanent resident, and occupy the property as your principal place of residence for at least 12 months.

First Home Owner Grant for New Builds

Victoria's First Home Owner Grant provides $10,000 for new homes valued up to $750,000. This includes newly built homes, substantially renovated properties, and off-the-plan apartments. In Kew, opportunities to access this grant are limited given the suburb's established character, but it becomes relevant for buyers looking at new apartment developments or for those purchasing vacant land and building.

The grant is paid after settlement and can't be used as part of your deposit, but it provides a useful cash injection in the months after you move in when furniture, appliances, and minor works start to add up.

The First Home Super Saver Scheme

The First Home Super Saver Scheme allows you to make voluntary contributions into your superannuation fund and later withdraw them for a home deposit, along with associated earnings. You can contribute up to $15,000 per financial year and withdraw a total of up to $50,000. Contributions are taxed at 15% rather than your marginal tax rate, which creates a genuine tax advantage if you're earning above $45,000.

In a scenario where a buyer contributes $15,000 per year over three years while earning $85,000, the tax saving compared to a standard savings account is roughly $6,000 to $7,000. That difference can cover your building inspection, conveyancing, or pest report. The scheme works particularly well for buyers in Kew who are earning solid incomes but find it difficult to accumulate a deposit while renting in the area, where median weekly rent for a two-bedroom apartment sits above $600.

You need to apply through the ATO to release the funds, and there's a processing time of around 15 to 25 business days, so this needs to be factored into your timeline if you're close to making an offer.

Pre-Approval and What It Actually Confirms

Pre-approval gives you a conditional commitment from a lender based on your income, expenses, deposit, and credit history. It doesn't lock in an interest rate and it doesn't guarantee final approval, but it does confirm your borrowing capacity and shows sellers that you're in a position to proceed. In Kew's tightly held market, where quality properties often attract multiple offers, a pre-approval can make the difference between your offer being taken seriously or being passed over.

Pre-approval is typically valid for three to six months, depending on the lender. If your circumstances change during that period, such as a job change, new debt, or a significant purchase, you need to inform your lender as it may affect your ability to settle.

Gift Deposits and How Lenders Assess Them

Many first home buyers in Kew receive financial help from family, either as a gift or an early inheritance. Lenders will accept gifted funds as part of your deposit, but they require a signed statutory declaration from the person providing the funds confirming that the money is a genuine gift with no expectation of repayment. Some lenders also require evidence of where the funds came from, particularly if the amount is large, to meet anti-money laundering requirements.

Gifted funds can be combined with your own genuine savings, but most lenders still want to see that you've saved at least 5% of the purchase price yourself over a period of at least three months. This demonstrates that you can manage regular repayments.

Fixed Versus Variable Interest Rates

A fixed interest rate locks in your repayments for a set period, typically one to five years. A variable interest rate moves with the market, which means your repayments can go up or down. Many first home buyers in Kew split their loan between fixed and variable to balance certainty with flexibility. For instance, fixing 60% of the loan provides stable repayments while leaving 40% variable gives access to an offset account and the ability to make extra repayments without penalty.

Fixed rates don't usually allow offset accounts or unlimited extra repayments, and breaking a fixed rate early can result in significant costs if rates have fallen. Variable loans are more flexible but expose you to rate rises. Your decision should be based on your income stability, your tolerance for repayment changes, and how long you intend to hold the property.

Offset Accounts and Redraw Facilities

An offset account is a transaction account linked to your home loan. The balance in the offset reduces the amount of interest you pay without locking the funds away. If you have a $500,000 loan and $20,000 in your offset, you only pay interest on $480,000. You can access the funds at any time, which makes it useful for managing irregular income or holding money for upcoming expenses like rates, insurance, or holidays.

A redraw facility allows you to access extra repayments you've made on your loan. The key difference is that redraw is not a separate account and some lenders place limits on how often you can access it or charge fees. Offset accounts are generally more flexible and are available on most variable home loans, though they're rarely offered on fixed rate loans.

Lenders Mortgage Insurance and When You Pay It

Lenders Mortgage Insurance is a one-off cost charged when you borrow more than 80% of the property value. It protects the lender, not you, and can add between $10,000 and $40,000 to your upfront costs depending on your deposit size and loan amount. It's usually capitalised into the loan rather than paid in cash, but that means you're paying interest on it for the life of the loan.

The First Home Guarantee allows you to avoid LMI with a 5% deposit, but if you're purchasing outside the scheme or above the price cap, you'll need to either save a 20% deposit or factor LMI into your budget. Some lenders also offer LMI waivers for certain professions, including medical practitioners, accountants, and lawyers, which can be relevant for buyers in Kew given the suburb's high proportion of professionals.

Using a Mortgage Broker in Kew

A mortgage broker compares loan options across multiple lenders and manages the application process from pre-approval through to settlement. This is particularly useful for first home buyers who are balancing stamp duty concessions, the First Home Guarantee, and varying lender policies on gifted deposits, casual income, or recent employment changes. Brokers can also identify lenders that are more flexible with serviceability or offer better interest rate discounts based on your deposit size and loan amount.

Most brokers don't charge fees to borrowers as they're paid by the lender once the loan settles. The value is in the time saved, the access to lenders you wouldn't approach directly, and the guidance through each stage of the process. For buyers in Kew who are often juggling work commitments and limited weekend availability, having someone manage the documentation and follow-up can reduce the time from pre-approval to settlement by several weeks.

Call one of our team or book an appointment at a time that works for you.

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