Hunter Scribe, Author at AXTON Finance

Melbourne first home buyers win with 5% deposit scheme update

Posted on 29/08/2025 by Hunter Scribe

From 1 October 2025, major changes to the federal government’s Home Guarantee Scheme (HGS) will make it easier for first home buyers in Melbourne to enter the property market with a smaller deposit.

What’s changing in the Home Guarantee Scheme?

Several key changes are set to benefit Melbourne buyers:

First, the cap on participant numbers has been lifted. That means any eligible first home buyer with at least a 5% deposit can now apply, potentially avoiding lenders mortgage insurance (LMI), which is typically required for low-deposit loans.

Second, income limits have been scrapped. Previously, single applicants earning over $125,000 and couples earning over $200,000 were excluded. Now, higher-income earners and dual-income households can apply, opening the scheme to more professionals who were previously ineligible.

Third, the property price caps have been increased to better reflect current dwelling values. The table below shows the new prices.

In Victoria, the cap for Melbourne and regional centres rises from $800,000 to $950,000.

As of July 2025, Melbourne’s median dwelling value was $824,000 according to PropTrack, so the new cap brings more homes and suburbs within reach.

Finally, the Regional First Home Buyer Guarantee will merge into the standard First Home Guarantee, streamlining applications outside capital cities.

How the scheme works

The HGS allows eligible first home buyers to secure a property with a deposit as low as 5%. The government guarantees a portion of your loan (up to 15% depending on the product), meaning you can avoid paying LMI.

Buyers can access loans with the HGS from a selection of more than 30 participating lenders, including major banks, regional banks and customer-owned lenders.

Along with the changes outlined above, the federal government has asked Housing Australia to review the lender panel with the goal of adding more options. This would give buyers a broader choice of loan products and terms to suit their needs.

Applying for the 5% deposit scheme

The application process is straightforward when you work with a mortgage broker:

Your broker will explain how the Home Guarantee Scheme works and assess your eligibility based on the latest criteria
They’ll confirm the property price cap for your location and help you understand what kind of property you can target
They’ll recommend suitable lenders that participate in the scheme and guide you through gathering the right documentation
They’ll submit your application to the chosen lender for pre-approval and support you through to settlement
They can also structure your loan strategically to suit your broader financial goals

Why acting fast could pay off

While the changes open the door to more buyers, they could also drive up competition – and prices – in certain brackets.

Experts have warned that the higher caps and wider eligibility may boost demand, especially for homes priced near the $950,000 mark. In Melbourne, that could lead to increased competition for properties around that level, so acting quickly once you’re ready could give you an edge.

Knowing what you’re looking for, getting pre-approval and understanding your budget are critical.

What to plan for beyond the deposit

While the Scheme reduces the barrier of a large deposit, there are other important costs to factor in:

Loan repayments

A smaller deposit means a bigger loan. Ensure your budget can comfortably cover repayments alongside your day-to-day living expenses.

Interest rate fluctuations

Rates can rise over time, affecting your monthly repayments. It’s important to factor potential increases into your financial planning.

Stamp duty costs

Some buyers may qualify for concessions or exemptions, but it’s still a major upfront cost. Your broker can check what you’re eligible for.

Legal and conveyancing fees

You’ll need to budget for the cost of a solicitor or conveyancer to manage the legal side of your purchase.

Property maintenance costs

Owning a home comes with ongoing costs such as repairs, insurance and utilities. These should be included in your budget.

Long-term financial planning

Consider how your mortgage fits with broader goals, like saving for retirement, investing or family planning.

Modelling your finances with AXTON’s Next Purchase software

To help you plan with confidence, AXTON Finance offers the Next Purchase software. This tool lets you model cash flow, stamp duty, ongoing costs and borrowing capacity both before and after settlement.

By testing different scenarios, including changes in interest rates, deposit size or purchase price, you can see how each decision impacts your long-term position.

Combined with expert advice from a mortgage broker, this tool helps you buy with clarity and confidence.

Why working with a broker can help

A mortgage broker can guide you through the updated Home Guarantee Scheme rules, help you access the right lender and structure your application for maximum benefit. With unlimited places, higher caps and increased eligibility, demand is expected to spike. Having an expert guide the process gives you a stronger chance of securing the right loan and the right property.

At AXTON Finance, we specialise in helping first home buyers navigate these opportunities, matching you with the right lender and ensuring your loan supports your long-term financial goals.

Thinking about buying with just a 5% deposit? With new price caps and unlimited places, now’s the time to act. AXTON Finance can guide you through the scheme and help you secure the right loan. Call 03 9939 7576, email  [email protected] or get in touch to get started.

Relocation, upsizing or downsizing? Plan your next move with AXTON Finance’s revolutionary Next Purchase software

Posted on 26/08/202526/08/2025 by Hunter Scribe

Moving house is one of the biggest financial and lifestyle decisions you can make. Whether you’re relocating to a new area, upsizing to fit a growing family or downsizing to free up time and capital, the move itself may be exciting – but the financial planning behind it can make the process overwhelming.

Beyond the search for the right home, you need to understand how the purchase will affect your monthly cash flow, how much deposit you’ll need, what your new loan-to-value ratio (LVR) will look like and, if you’re investing, whether the numbers still stack up after all costs. These calculations aren’t always straightforward, and small errors can have major consequences.

The problem with traditional property planning

For most Australians, relocation finance planning has traditionally meant spreadsheets, manual “what if” scenarios and hoping the numbers are accurate.

What happens if interest rates rise? What if you sell for a little less than expected? How will that impact your borrowing capacity?

Without the right tools, it’s easy to underestimate costs, misjudge cash flow or overlook how your overall portfolio might be affected. This uncertainty often leads people to delay decisions, or worse, make them without a clear picture of the risks and outcomes.

Introducing AXTON Finance’s Next Purchase software

At AXTON Finance, we know that clients want clarity, not guesswork. That’s why we developed the Next Purchase property planning tool: a first-of-its-kind platform designed to simplify even the most complex relocation scenarios.

Exclusively available to AXTON Finance clients, the software allows you to model realistic outcomes tailored to your situation. Instead of relying on estimates, you can see precise calculations for:

Cash flow property planning: how much you’ll have left each month after mortgage repayments and holding costs
Funds required: including stamp duty, purchase costs and your cash contribution
Purchase LVR: your borrowing percentage on the new property
Portfolio LVR: your total debt position across all properties, showing the bigger financial picture and aligning your LVR and mortgage strategy

How does the Next Purchase property planning tool work?

The Next Purchase tool goes beyond static calculators. It lets you adjust key variables, such as the purchase price, sale price, deposit, interest rates or rental income and see the outcomes instantly.

Every change updates in real time, with clear visual outputs that show:

Monthly cash flow, including surplus or shortfall after expenses
Loan-to-value ratios (LVR) for the new purchase and your overall portfolio
The exact funds you’ll need to complete the transaction, including stamp duty and costs

For example, as the screenshot above shows, a $2.25 million purchase generates a projected surplus of $1,225 per month, with both purchase and portfolio LVRs at 28%. If you adjust the sale price of your existing home or shift the interest rate, the software recalculates immediately, giving you clarity about whether your goals remain achievable.

Instead of relying on guesswork or spreadsheets, you can stress-test different scenarios in minutes and make informed relocation finance planning decisions without the guesswork.

Who benefits from our Next Purchase software?

This software is designed for anyone preparing to buy their next property:

Upsizers & Relocators: Moving homes, interstate or across the country? Our software helps you manage the complexities of buying and selling in different markets, giving you a complete financial picture from start to finish.

Investors: Thinking about your next investment property? Use Next Purchase to test different scenarios and see the projected return on investment, cash flow and LVR impacts before you commit. It’s the ultimate investment property financial modelling tool.

First Home Buyers: Buying your first property comes with lots of unknowns. The software shows exactly how all the variables interact, giving you a clear picture of what works best for your situation. It’s especially useful for showing your cash flow post-settlement, once rent payments stop and your savings levels return to a normal rhythm.

Clients are already feeling the impact

Clients using the Next Purchase software describe the experience as a game-changer. Instead of feeling buried under numbers and uncertainty, they can clearly see the path forward. Many say it makes once-complex goals feel “remarkably achievable,” giving them the confidence to act quickly when the right property comes along.

Plan your Next Purchase with confidence

For a limited time, AXTON Finance is offering a complimentary Next Purchase Consultation, giving you exclusive access to this brand-new software.

Whether you’re relocating, upsizing, downsizing or investing, this is your chance to move beyond guesswork and plan your next property decision with confidence.

Book a session with one of our expert brokers and see how our Next Purchase property planning tool can help make your property goals a reality.

Refinancing in Melbourne: Seizing opportunities amidst interest rate cuts

Posted on 22/08/2025 by Hunter Scribe

After a prolonged period of high interest rates, recent cuts from the Reserve Bank of Australia (RBA) are offering Melbourne homeowners and investors a welcome chance to rethink their mortgage strategy.

Whether you’re looking to reduce repayments, unlock equity or restructure for future growth, refinancing now could be a smart move.

What the rate cuts mean for you

The RBA’s decision to cut the official cash rate in August for the third time this year, bringing it to 3.60%, is a direct response to a changing economic environment. Inflation has continued to ease, rising just 2.7% in the June quarter, down from 2.9% in March, according to the Australian Bureau of Statistics (ABS).

Unemployment has also eased slightly, with the rate falling to 4.2% in July from 4.3% in June, according to the ABS. While this is still considered a tight labour market, it suggests that the economy is no longer overheating.

The RBA’s goal with these cuts is to keep inflation sustainably within its target band of 2–3% while avoiding a sharp rise in unemployment. By easing monetary policy, the RBA is providing support for economic growth, aiming for a “soft landing” where inflation moderates without causing a significant economic downturn.

This not only impacts people taking out new loans, but also existing mortgage holders.

If your lender has passed the rate cuts on to their customers in full, homeowners with a variable-rate home loan would already have seen a reduction in monthly repayments. Across the country, average monthly repayments have dropped by around $70–$120, depending on the state, according to Mozo.

In Victoria, for example, a typical owner-occupier loan of $628,000 is likely to see repayments fall from $3,989 to $3,894 per month – a saving of $95 monthly, or $1,137 over the course of a year.

Refinancing for a lower interest rate

If you’re on a fixed-rate loan, your repayments won’t change until the fixed period ends. However, refinancing gives you the option to move sooner and secure a rate that better reflects today’s lower cash rate environment. Depending on your lender, there may be break costs to consider, but the long-term savings can sometimes outweigh the upfront expense.

For borrowers on variable rates, there are also opportunities. While your repayments may already have dropped in line with recent cuts, not all lenders pass on the full benefit. On top of that, competition between banks and non-bank lenders is intense, with many offering sharper rates or cashback deals to attract refinancers. Comparing these options and switching through refinancing could see you reduce repayments even further.

The difference might seem small, but it adds up quickly. Those savings can be redirected to other goals, such as paying down your loan faster, building an investment portfolio, funding renovations or boosting your savings buffer.

Looking beyond interest rates

A rate cut isn’t just about reducing your monthly repayments. Even if your variable rate has already adjusted, refinancing can still deliver value. Some lenders don’t pass on the full cut, and others may offer better features, loan structures or terms that suit your goals.

Consolidating multiple loans

Refinancing can help you bring multiple debts together, including your home loan, personal loans or other mortgages. Consolidating your lending can simplify repayments, improve cash flow and unlock equity for future plans.

Accessing equity

Refinancing allows you to release some of the equity in your property. This can be used for a range of strategic purposes – from funding a renovation, to helping children with a deposit or growing your investment portfolio.

Re-structuring for tax efficiency

For investors or self-employed clients, the way your loans are structured can have significant tax implications. Refinancing provides an opportunity to ensure your lending is optimised for deductibility and flexibility.

Improving product features

Some loans may not include features like offset accounts, redraw facilities, or flexible repayment options. Refinancing can give you access to these tools, helping you take greater control of your finances.

Switching to new loan terms

Refinancing gives you the option to change your loan term, which can have a big impact on your finances. Shortening your loan term means you’ll pay off your mortgage faster and reduce the total interest paid over the life of the loan. On the other hand, extending your loan term can lower your monthly repayments, giving you extra cash flow for other priorities, like investing, renovating or saving.

What to consider before refinancing

While the current environment presents clear opportunities, refinancing may not be the right move for your situation or long-term goals. It’s important to weigh up:

Potential break costs: If you are still in a fixed-rate period, exiting early can incur significant fees that may offset the savings from a lower rate.
Application or discharge fees: Lenders may charge fees to set up a new loan or discharge an existing one, which need to be factored into your overall cost.
The total cost of switching versus the projected savings: It’s not just about the monthly savings. You also need to think about the total interest you could save over the life of the loan. Calculate whether the combined costs – including fees, charges and any temporary interest differences – are worth the potential savings. This helps ensure that refinancing actually improves your financial position in the long term, not just in the short term.
Your property’s value: The equity available in your home affects your borrowing options and whether refinancing is financially viable.
Your long-term plans: If you plan to sell within a short period, the benefits of refinancing may be limited, as costs and administrative requirements could outweigh the savings.

Why using a broker makes a difference

Refinancing can be more complex than simply switching to the lowest advertised rate. Every borrower’s situation is different – from loan size and income structure to investment goals and long-term plans. A mortgage broker like AXTON Finance can provide expert guidance tailored to your circumstances.

We do more than compare rates. We analyse your current loan, identify opportunities to reduce repayments, release equity or restructure for tax efficiency and recommend the loan term and product features that suit your goals. With access to premium offers and a range of lenders, we ensure you are getting a solution that works for today and the future.

Ready to make the most of the rate cuts? Refinancing can be complex, but with the right guidance, it can also be highly rewarding. Contact AXTON Finance today to discover how much you could save while building a mortgage strategy tailored to your goals. Call 03 9939 7576, email [email protected] or get in touch to get started.

The secret to getting a mortgage approval as a self-employed borrower

Posted on 11/08/202522/08/2025 by Hunter Scribe

If you’re self-employed, getting a home loan can be trickier. Lenders want to see consistent income, and if yours fluctuates or you minimise tax, it can raise red flags.

According to the Australian Small Business and Family Enterprise Ombudsman, there were 1.7 million self-employed Australians in June 2024. This was 4.9% more than in 2023 and made up 62.5% of all businesses in the country.

Despite this growing segment, many self-employed Australians face additional hurdles when applying for a home loan. But here’s the good news: with the right preparation and expert help, self employed home loans are well within reach.

Why self-employed borrowers face more challenges in getting a mortgage

Lenders can sometimes see self-employed applicants as a higher risk. That’s because:

Your income can fluctuate, making it harder to assess borrowing power.

Tax deductions can reduce your taxable income on paper, which may make you look less financially capable, even if your cash flow is strong.

Your income is more difficult to verify as you don’t have traditional payslips like a salaried employee. You need to rely on tax returns and financial statements, which may not always reflect the true picture.

In addition, the application process can be more involved. You’ll typically need to provide full tax returns, business financials and other supporting documents.

Many lenders also require that your business has been operating for at least two years and ideally with a consistent or upward income trend. Without this track record, your chances of approval may be reduced.

Key documents required for a self-employed home loan application

If you’re applying for a self employed home mortgage, expect to provide detailed records. That’s because lenders want to see both how much and how consistently you earn.

Here’s what you’ll typically need:

Personal and business tax returns for the last 1–2 financial years
Business financials including a profit and loss statement and balance sheet
Business Activity Statements (BAS) or bank statements to verify ongoing income and expenses
ABN and GST registration details (especially if you’re a sole trader or contractor)

Some lenders may request interim financials if you’re applying mid-financial year, or if your most recent tax return doesn’t reflect your current income.

Clean, accurate and up-to-date financials can make all the difference. It’s worth working with your accountant early to ensure your numbers tell the right story.

Full-doc vs low-doc loans: which one should you choose?

When applying for self employed home loans, you’ll generally have two main options: full-doc or low-doc. Which one you choose depends on how much financial documentation you can provide and how strong your numbers are.

Full-doc loans

These are the most common options for self-employed borrowers who can provide at least two years of consistent, verified financial information.

Full-doc loans often offer access to a broader selection of lenders, potentially resulting in more competitive interest rates and additional features like offset accounts and redraw facilities.

Low-doc loans

Low-Doc loans are designed for self-employed borrowers who can’t meet the standard documentation requirements, such as those who have recently started their business, haven’t completed recent tax returns or have income that’s difficult to verify in traditional ways.

Instead of relying on full tax returns and profit-and-loss statements, low-doc lenders may accept alternative forms of income verification. These can include recent business bank statements, BAS statements or a signed letter from your accountant confirming your income.

While low-doc loans provide more flexibility, they can also come with trade-offs, such as higher interest rates and larger deposit requirements.

Strategies to improve your mortgage approval chances

Even though mortgages for self employed borrowers require more legwork, there are smart ways to boost your approval chances, especially if you start preparing early.

Here’s how to get your finances in shape:

Keep taxable income high: Avoid excessive deductions in the one to two years before applying.
Reduce your debts: Paying down credit cards, personal loans or business liabilities can improve your debt-to-income ratio.

Save for a bigger deposit: Aim for at least 20%. A larger deposit shows lenders you’re financially responsible and have more skin in the game. This reduces their risk and can improve your chances of approval. As a bonus, it can also help you avoid paying lenders’ mortgage insurance (LMI).

Improve your credit score: Improving your credit score shows lenders that you can manage debt effectively. Pay off overdue accounts, avoid multiple credit applications and keep business and personal debts separate.

The key is to plan ahead. Aim to start preparing at least 6–12 months before you apply. This gives you time to get your finances in shape, improve your credit position and build a strong case for your loan application.

Alternative lenders & non-traditional mortgage solutions

When it comes to self-employed home loans, not all lenders operate the same way. Traditional banks tend to have strict rules, especially around income verification and business history, which can make approvals difficult.

That’s where alternative lending options come in.

First, non-bank lenders are regulated financial institutions that aren’t banks. They often assess applications more flexibly, which can help if you have a newer business, irregular income or a complex structure. Many accept alternative income verification, like BAS or bank statements.

Non-bank lenders offer traditional loan products (like home loans, asset finance or vehicle loans), but often with more flexible criteria than major banks. Their turnaround times can be quick, with fast assessment criteria.

According to the Reserve Bank of Australia, non-bank lending is growing rapidly. In 2024, it accounted for 6% of financial system assets.

As the graph below shows, RFCs (or registered financial corporations, which make up around half of non-bank lenders by size) grew their share of housing lending over 2024 at a faster rate than banks.

Private lending is another alternative source of self employed home loans. These lenders, often individuals or small groups, may offer short term or bridging loans, especially useful if you’re waiting for updated financials or tax returns.

So, when should you consider alternative financing over a traditional bank?

Well, if you’re struggling to meet tough serviceability requirements or can’t supply two years of tax returns, alternative lenders may offer a more flexible path. Many accept alternative income verification, such as BAS statements or accountant letters.

Just keep in mind, interest rates can be higher and some features may be limited. A mortgage broker can help weigh the trade offs and find the right option for your situation.

Also, don’t overlook government schemes. Depending on where you’re buying and your circumstances, you may still qualify for First Home Owner Grants, stamp duty concessions or other support, even if you’re self-employed.

Why working with a mortgage broker makes a difference

Applying for a self employed home mortgage either you are a doctor or lawyer takes careful planning, tailored strategy and, in some cases, a bit of negotiation. That’s where a mortgage broker can make a big difference.

Mortgage brokers:

Have access to lenders who specialise in self-employed clients
Know what documents to prepare
Understand lender policies
Can negotiate favourable rates and terms

Applying directly with a bank is an option, but if your application is rejected, it can impact your credit file and reduce your future borrowing options. This is especially risky for self-employed borrowers.

A broker helps you avoid these pitfalls by matching you with the right lender from the start.

Plus, brokers are bound by best interest duty. We’re required to recommend the loan that’s right for you, not one that pays us the most.

Final steps to a successful mortgage application

Want to give yourself a good chance of approval? Here’s a final checklist:

Start early: Ideally, 6 to 12 months before you plan to buy
Get your books in order: Ask your accountant to prepare lender-ready financials
Keep your income consistent: Avoid big business changes or cash flow spikes
Work with a broker: We’ll help flag any red flags before your application reaches the lender

By planning early and getting expert guidance, you’ll avoid delays and boost your chance of approval.

How we help self-employed buyers get approved

At AXTON Finance, we specialise in helping self-employed Australians secure the self employed home mortgage that suits your financial citation and long-term goals. Whether you’re a sole trader, freelancer, company director or contractor, we understand the ins and outs of mortgages for self employed clients.

Our team will take the time to understand your business, help you gather the right documentation and match you with lenders that make sense for your situation. We’ll do the hard work, so you can focus on growing your business and planning your next move.

Self-employed and ready to buy a home? AXTON Finance can help business owners secure the right loan with the right lender. Call 03 9939 7576, email [email protected] or get in touch to get started.

Dwelling completions climbed 6% over the last year in Victoria

Posted on 04/08/202522/08/2025 by Hunter Scribe

More homes are finally making it to market in Victoria, offering welcome relief for buyers and investors. That’s after Australian Bureau of Statistics (ABS) data shows a 5.9% increase in the number of dwellings completed in the 12 months to March 2025 when compared to the previous year.

This uptick suggests more homes are finally making it through the pipeline – welcome news for a market that’s struggled to keep pace with population growth and housing demand.

Victoria tops the charts for new housing completions

In total, 59,878 dwellings were completed across the state over the last year, according to the ABS. As the graph shows, this is well ahead of the next state, New South Wales, where 45,101 dwellings were completed.

Victoria has long led the pack on new builds, with more dwelling completions than any other state in every quarter since before the pandemic

Encouragingly, momentum is building earlier in the pipeline too. Victoria also topped the country for dwelling commencements, pointing to further supply increases on the horizon.

In the 12 months to the March 2025 quarter, construction began on just over 54,000 new dwellings, up 3.6% from the previous 12-month period. While most states and territories saw a lift over this period, Victoria’s increase was the largest.

Detached homes driving growth

Most of the recent growth in new supply has come from detached houses in the private sector, which tends to dominate in outer suburban growth corridors. Of all dwellings completed in the past year, 63.5% were private sector houses.

The HIA’s data shows that Victoria’s growth in detached new home sales was part of a broader national trend. Two rate cuts and stabilising inflation have improved borrowing conditions and reignited interest in new homes.

New home sales are also up

The uplift in construction is also being backed by renewed buyer interest. Nationally, new home sales jumped 18.8% in the June quarter – the strongest result in nearly three years. Once again, Victoria is leading the way.

According to the Housing Industry Association (HIA), Victoria saw a 27.7% increase in new detached home sales in the June 2025 quarter compared to the previous three months. This was the largest gain of any state.

However, the HIA cautioned that sales volumes in Victoria remain low by historical standards. High land costs, long lead times and ongoing builder capacity constraints continue to limit supply.

Numbers remain below government targets

The Victorian government has set a target of building 800,000 new homes by 2034. Having started in 2024, this would require the delivery of 80,000 new dwellings annually. So, while the current improvements on commencements and completions are positive, numbers are still well below what is required in order to meet these state targets.

And, given that the goals were set based largely on population growth rates, if targets are not met, the housing shortage will likely persist, putting further pressure on the overall housing market.

Why is this important news for buyers?

For Melbourne buyers, especially those looking to upgrade or invest, rising completions are significant. More dwelling options, including house and land packages or brand-new builds, offer greater flexibility in terms of design, location and features.

More stock can also reduce competition in some parts of the market, easing price pressure and creating a more favourable environment for buyers.

For investors, new properties can offer strong depreciation benefits, lower maintenance costs and better tenant appeal. With population growth continuing to fuel rental demand, well-located new builds can deliver stable returns while avoiding the hidden costs often found in older homes.

What to consider when buying a new build

If you’re thinking about buying in Melbourne’s growing new-build market, here are a few key things to keep in mind:

Loan type

The type of loan you need will vary depending on the structure of your purchase. If you’re buying a house and land package or building from scratch, you’ll likely require a construction loan. These differ from standard home loans, with progress payments made at each stage of construction. Your broker can explain the process and help ensure your loan structure is right.

Due diligence

It’s just as important to do your homework on a new build as it is with an established home. Check exactly what’s included in the build price, assess the builder’s reputation, and confirm timelines and inclusions. A thorough contract review can help prevent costly surprises.

Stamp duty concessions

In Victoria, off-the-plan purchases and newly built homes can qualify for stamp duty concessions or even full exemptions. These savings can be significant, so speak to your mortgage broker about what you might qualify for.

Talk to a broker before you buy or build

With more new builds entering the market, buyers have more choice – but also more decisions to make. Choosing between build types, loan structures and available government incentives can be complex.

An experienced Melbourne mortgage broker like AXTON Finance can make the process simpler. We can compare suitable loan options, explain construction finance, help you access concessions and connect you with professionals such as conveyancers and building inspectors to support your due diligence.

By working with a broker, you’ll gain clarity, save time and feel more confident in your next property move.

If you’re exploring opportunities in Melbourne’s growing new build market, AXTON Finance can help you make a confident next step. Call 03 9939 7576, email [email protected]

Should you wait for more cuts or buy now?

Posted on 28/07/202522/08/2025 by Hunter Scribe

It’s the question on many buyers’ minds right now: Should you wait for the Reserve Bank of Australia (RBA) to make more rate cuts, or take action now?

At face value, it might seem smart to wait. After all, lower rates could increase your borrowing power and reduce repayments. But in practice, trying to time the market perfectly can backfire.

Whether you’re looking to upgrade or invest in property in Melbourne, weighing up the risks of waiting versus buying now comes down to your goals, finances and how the market is moving.

The cost of waiting

For buyers looking to upgrade or invest, delaying your move might seem prudent in uncertain times, but it can come at a significant cost:

Missed capital growth

Property values in desirable Melbourne suburbs tend to appreciate over time. Every month spent waiting could mean missing out on potential capital growth. For instance, Melbourne’s median dwelling value declined over the last two years, but since the beginning of 2025 has started to recover. Over the June 2025 quarter, the city’s median dwelling value grew 1.1%, according to Cotality. Over the last 10 years, prices have grown 40.6%.

This recovery suggests buyers waiting for a clear turning point may already be behind it. The long-term growth shows how property continues to deliver value. Short-term rate fluctuations tend to have less impact over time than buyers expect. What matters more is getting into the market early enough to benefit from compounding capital growth.

Increased competition

In the week ending 20 July, only 586 homes were scheduled for auction in Melbourne, according to PropTrack – 9% fewer than the same week in 2024. This subdued activity is partly due to the RBA’s decision to hold rates steady in July, prompting some sellers to delay listing their homes.

But even before that, stock levels had been lagging. SQM Research also reports that total listings in Melbourne were down 0.8% year-on-year in June.

At the same time, buyer demand is picking up. The Westpac-Melbourne Institute’s July 2025 consumer sentiment bulletin shows rate expectations are at their lowest point in 13 years, and the ‘time to buy a dwelling’ index has risen 16.9% compared to a year ago.

With fewer properties on the market and more buyers regaining confidence, the balance between supply and demand is tipping. If this trend continues, it could lead to tighter competition, faster selling conditions and further price pressure.

Reduced purchasing power

Even small increases in property prices can have a significant impact on what you can afford. Domain is predicting Melbourne’s prices will climb 6% for houses and 5% for units over the 2025-26 financial year. If you are looking at a median-valued house, that’s $66,000 added to the asking price over the next year.

As prices rise, your borrowing capacity may not stretch as far, meaning you could be priced out of your preferred location or need to compromise on property features.

The risks of buying too quickly

While the costs of waiting can be significant, it’s also true that rushing into a purchase without due diligence carries its own set of risks:

Overpaying

Buying quickly without thorough market research can lead to paying more than necessary. A rushed decision might mean missing a better deal if the market shifts.

Emotional bidding, particularly at auctions, can also lead to paying more than a property’s true market value, which can reduce your potential gains.

Overlooking hidden issues

Skipping proper due diligence, such as thorough building inspections, can expose you to costly repairs or legal complications down the road. According to research done by the Australian Housing and Urban Research Institute in 2024, 70% of homes had some building quality problems. Cracks in the walls were the most common issue (44%), followed by mould (35%) and plumbing issues (27%).

Rushing the process increases the chance of missing these critical problems, which can affect both your finances and peace of mind.

Getting thorough pest, building and structural inspections before committing is essential. These reports help you uncover hidden issues early, so you avoid costly surprises later and can negotiate confidently.

Compromising your strategy

Purchasing a property that doesn’t align with your long-term goals can set you back financially and emotionally. Whether it’s location, property type or loan structure, buying without a clear strategy may result in costly compromises, such as higher ongoing costs or difficulties when you decide to sell or rent out the property.

You can’t time the market, but you can be ready

With prices recovering and competition rising, waiting could mean missing out. But market conditions can change anytime, and no one can pick the perfect time. Being financially ready, strategically prepared and confident enough to act when the right property comes up is what matters.

Instead of trying to predict the market, focus on what you can control:

Define your property strategy

Decide what you are looking to achieve with this purchase. Is it an upgrade on your current family home? Or are you buying an investment property to build long-term wealth?

Knowing your goals will help narrow your search and prevent decision fatigue. It also helps you weigh up trade-offs with greater clarity, so you’re not distracted by properties that don’t serve your purpose.

Know your borrowing power

Understanding what you can afford today is key. Lenders’ policies, interest rates and your financial circumstances all play a role in determining your borrowing capacity. Assessing your borrowing power involves a comprehensive look at your income, expenses, existing debts and desired loan structure.

Getting this clarity upfront means you can move quickly and decisively when the right property comes along, without the last-minute scramble of understanding your limits.

Get expert guidance

Surrounding yourself with the right experts can make the process smoother, faster and ultimately more rewarding. A mortgage broker can help you identify your borrowing power, compare suitable products from dozens of lenders and find a loan structure that suits your goals.

Still wondering whether to wait or buy now?

A good mortgage broker in Melbourne, like AXTON Finance, will help you answer the bigger question: is now the right time for you to buy?

We’ll guide you through weighing the pros and cons of buying now versus waiting, based on your unique financial position and property goals. We prepare you for a confident next step – whether that means acting quickly or holding back for the right opportunity.

If you’re unsure whether to wait or buy, talk to AXTON Finance today. Call 03 9939 7576, email [email protected] or click here to get started.

Everything you need to know about stamp duty exemptions in Victoria

Posted on 21/07/202523/08/2025 by Hunter Scribe

If you’re buying a property in Victoria, you’ve likely come across the term stamp duty. It’s a major cost that can add tens of thousands of dollars to your budget. But the good news is, you might not have to pay the full amount.

Whether you’re a first home buyer, pensioner or looking at an off-the-plan property, there are stamp duty exemptions and concessions in Victoria that could save you a significant amount.

However, these reliefs and eligibility rules can change frequently, so it’s important to stay up to date and get expert advice.

What is stamp duty and why does it matter in Victoria?

Stamp duty, also called land transfer duty, is a tax you pay when you buy property in Victoria and is paid to the State Revenue Office (SRO).

The calculation of stamp duty in Victoria is based on the “dutiable value” of the property. This is usually the higher of either the purchase price or the market value of the property. The rates are applied on a sliding scale, meaning the higher the property value, the greater the amount of stamp duty you’ll pay.

Land transfer duty for contracts entered into on or after 1 July 2021

Additionally, the usage of the property, such as whether it’s your primary residence or an investment, can also influence the duty payable.

Fortunately, various stamp duty exemptions and concessions are available to eligible buyers, helping to reduce this significant upfront cost.

Who is eligible for stamp duty exemptions in Victoria?

Victoria offers several pathways to reduce your stamp duty burden. Eligibility for these exemptions and concessions largely depends on your circumstances and the nature of the property purchase.

First home buyers

If you’re purchasing your first home in Victoria, you could join the more than 40,000 first home buyers who received stamp duty relief in the 2023-24 financial year, according to the SRO (see table).

The first home buyer Victoria stamp duty exemption or concession is only available to you once. If you or your partner has previously benefited from the first home buyer exemption, you can’t receive it again.

Pensioners

Eligible pensioners and concession card holders may qualify for a pensioner concession. If you’re purchasing a home valued at $600,000 or less, you may qualify for a full exemption. Homes valued from $600,001 to $750,000 may qualify for a concession. This only applies to properties that you intend to use as your principal place of residence (PPR). If you are buying your first home, you may also be eligible for other concessions and benefits.

Off-the-plan buyers

The Victorian government offers concessions for off-the-plan purchase, as well as a temporary concession (available until October 2026) for new builds in strata subdivisions with common property.

Principal place of residence

If you intend to live in the property as your primary home for a continuous period of at least 12 months, you may be eligible for a concession. This is available to all home buyers, not just first home owners, if your property is valued up to $550,000.

First home buyer stamp duty concessions in Victoria

According to the Australian Taxation Office (ATO), 37,882 first home buyers took out new home loans for their PPR in 2024. This was an 11.2% increase from 2023.

If you’re one of the many first home buyers planning to purchase soon, knowing what financial relief you’re entitled to is a smart first step.

As a first home buyer in Victoria, you could receive:

A full stamp duty exemption for properties with a dutiable value of $600,000 or less. This means you pay no stamp duty at all, representing substantial savings.
A concession for properties with a dutiable value between $600,001 and $750,000. The amount of the concession scales down as the property value increases within this range.

For example, if your first home is valued at $595,000 you will pay no stamp duty. This saves you around $30,770.

If your home costs $700,000, your payable duty will be $24,713. But, without the first home buyer concession, this would jump to $37,070.

If you paid $800,000 for your first home, you are over the concession threshold and will pay the full $43,070 (unless other exemptions apply).

First home buyers in Victoria can benefit from both the stamp duty concession or exemption, as well as the First Home Owners Grant (FHOG). The FHOG is a direct payment for new homes, while the stamp duty concession is a reduction in the amount of land transfer duty you pay.

Off-the-plan stamp duty concessions: What you need to know

Buying off the plan (before construction or while it’s underway) may qualify you for stamp duty relief. In Victoria, there are two types of concessions that could apply:

1. Dutiable value concession

When purchasing an established home, you pay stamp duty on the dutiable value of your property. This is usually what you paid for it or the market value. However, for the off-the-plan concession, the dutiable value is the contract price minus the construction costs incurred after you signed the contract. As this reduces the dutiable value, you will likely pay less stamp duty.

For example, you make an off-the-plan purchase for $620,000. Of that amount, your builder says $465,000 will be used to construct your home. That means your dutiable value will be $155,000 (contract price of $620,000 minus construction costs of $465,000.

Eligibility for this concession can depend on your contract date and any other concessions you may qualify for. It is recommended you speak to a mortgage broker to verify.

2. Temporary off-the-plan concession

Introduced in 2024, under this concession, all buyers (including investors) are eligible for a concession on off-the-plan purchases within strata subdivisions that have common property. This can include apartments and townhouses.

The temporary concession was due to end in October 2025 but has subsequently been extended to apply to all eligible purchases up to 20 October 2026.

How to apply for stamp duty exemptions in Victoria

Applying for a Victoria stamp duty exemption or concession usually occurs as part of the conveyancing process. Your conveyancer or solicitor will typically apply for the exemption or concession as part of the electronic conveyancing process, but it’s good to understand the steps involved.

Here’s a general guide to the application process:

1. Gather all documents

You’ll need to provide documentation to prove your eligibility. This commonly includes:

A copy of the contract of sale
Title details and transfer of land documentation
Proof of residency, if applicable (e.g. driver’s licence, utility bills)
Concession card details for pensioner exemptions
Any other supporting evidence for your claim (e.g. proof of being a first home buyer)

2. Complete the Digital Duties form

The SRO mandates the use of the Digital Duties Form for all land transfer duty transactions. This online form is where your conveyancer will declare details of your property purchase and apply for any eligible Victoria stamp duty exemptions or concessions.

3. Await response

Once submitted, the SRO will assess your application and notify you of the outcome. If approved, the stamp duty payable will be adjusted accordingly.

Common mistakes and things to consider when applying

While stamp duty exemptions or concessions can offer significant savings, it’s also important to be aware of the potential ways you could be disqualified and other common mistakes:

Buying over the threshold amount

Be vigilant about property values. If your property’s dutiable value exceeds the maximum threshold for a full exemption, you may only qualify for a concession or no exemption at all.

Using the property as an investment (when not allowed)

Some stamp duty concessions in Victoria are conditional on the property being your primary home. Using it as an investment property or failing to move in within the stipulated timeframe (usually 12 months) can lead to your exemption being revoked and duty becoming payable.

Failing to meet residency requirements

For concessions tied to your PPR, you must generally reside in the property for a continuous period (at least 12 months). If your circumstances change and you cannot meet this requirement, you must notify the SRO.

Incorrectly completing documentation

Errors or omissions on the Digital Duties Form or supporting documents can delay your application or even lead to rejection. Double-check all details, including contract dates, prices and personal information.

Not accounting for other costs

Stamp duty exemptions only relate to the transfer of the land or property itself. You will still be responsible for other property costs including legal fees, conveyancing fees, building and pest inspections and loan fees.

How AXTON Finance can help you navigate stamp duty exemptions in Victoria

Understanding stamp duty exemptions in Victoria can be overwhelming – especially when it comes to eligibility criteria, property price thresholds and paperwork. That’s where we come in.

At AXTON Finance, we’re experienced Melbourne mortgage brokers, with a deep understanding of Victoria’s property processes. That means we know all the ways to save on your home purchase, including which Victoria stamp duty exemptions or concessions you may be eligible for.

From first home buyers to off-the-plan purchasers, our team works closely with you to make your home buying journey as smooth – and cost-effective – as possible.

Get in touch with AXTON Finance today for expert advice on loans, grants and exemptions tailored to your unique circumstances. Call us on 03 9939 7576, email [email protected] or click here to get in touch.

What’s behind Melbourne’s rising property prices and what buyers need to know

Posted on 11/07/202527/08/2025 by Hunter Scribe

After a challenging few years, Melbourne’s property market is staging a comeback. New data confirms that the city’s long-awaited price recovery is taking hold, driven by a combination of relative affordability, population growth, easing economic pressures and renewed buyer confidence.

What’s happening with property prices?

Melbourne home values are rising again. PropTrack’s June 2025 home value index revealed that dwelling values climbed for the fourth consecutive month, taking annual growth into positive territory (1%) for the first time in over two years.

The city’s median house value now sits at $979,000, with units at $609,000.

Domain expects this growth to continue, forecasting Melbourne’s median house price to hit $1.11 million by the end of the 2025-26 financial year – a 6% increase year-on-year. That would mark a full recovery from the 2022–2024 downturn. Units are projected to climb 5% to $584,000.

What’s behind Melbourne’s rising property prices?

Affordability advantage fuels demand

One of Melbourne’s key selling points is its relative affordability compared to other major cities. In 2019, Sydney houses were 26% more expensive than those in Melbourne, according to Domain. As the graph below shows, by March 2025, that gap had grown to 63%.

Meanwhile, Brisbane and Perth have now caught up to Melbourne on price, eroding the cost advantage they offered in recent years.

In fact, as of June 2025, PropTrack’s data has Melbourne ranked sixth-most expensive city for median dwelling value, behind Sydney, Brisbane, Canberra, Adelaide and Perth.

This shift is drawing interest from price-sensitive buyers and interstate investors, particularly as borrowing conditions ease.

Strong population growth

Another factor bolstering Melbourne’s outlook is population growth. After falling behind during the pandemic years, in 2024 Victoria’s population grew at the second-fastest rate of all states at 1.9%, according to the Australian Bureau of Statistics.

The state accounted for 30% of the nation’s total population increase, its largest share in over a decade.

This growth drives long-term demand for housing. More people mean more competition for properties, particularly in high-demand suburbs close to employment, education and transport hubs.

Interest rate cuts boost buyer confidence

A timely driver behind Melbourne’s property market turnaround has been the Reserve Bank of Australia’s (RBA) recent interest rate cuts. After a prolonged period of rate hikes aimed at cooling inflation, the RBA has now cut the cash rate twice in 2025, signalling a clear shift in monetary policy.

Lower interest rates have a direct impact on buyer sentiment and affordability. As mortgage repayments ease, more buyers can enter the market, and existing buyers can stretch their budgets further. This creates increased competition for available properties, which in turn puts upward pressure on prices.

Although the RBA surprised markets by holding the cash rate in July, it is likely that there are more cuts to come. With inflation continuing to trend lower and economic conditions softening, many economists anticipate further reductions in the cash rate into 2026.

The RBA board itself forecasts the official cash rate will drop to 3.2% by mid-2026.

The prospect of lower rates is fuelling a sense of urgency among buyers hoping to purchase before the market accelerates further.

As borrowing capacity improves and confidence returns, interest rate cuts are helping to reignite the growth cycle, particularly in markets like Melbourne, where prices had previously stagnated.

What do buyers need to know?

Consider units if houses are out of reach

While both houses and units are experiencing growth, house prices are expected to recover fully from the 2022-24 downturn and reach new records by the end of the 2025-26 financial year, according to Domain.

Unit prices, while rising, are likely to lag behind and remain below their 2021 peak by June 2026. So while houses are leading Melbourne’s recovery, units offer a more affordable entry point.

Look beyond the inner suburbs

Outer and regional suburbs are playing a major role in Melbourne’s recovery. According to the Real Estate Institute of Victoria, Melbourne’s outer suburbs, such as Frankston, Frankston South and Rockbank have shown significant growth up 9%, 12.8% and 8.8% respectively in the June 2025 quarter.

Be ready to compete

Buyer demand is picking up quickly, but the number of properties for sale hasn’t kept pace. Total listings were down 0.8% year-on-year in June, according to SQM Research, tightening supply and intensifying competition across many price points.

Get your finance sorted early

With prices on the rise, borrowing power improving and listings still tight, this is a critical moment for Melbourne buyers. Acting early, and with the right support, can make all the difference.

Having pre-approval in place and a clear understanding of your budget can give you an edge in a fast-moving market, especially when the right property doesn’t stay available for long.

Additionally, working with a Melbourne mortgage broker like Axton Finance, with a deep understanding of the Melbourne real estate market, can help you understand your options, secure competitive rates and act quickly when the right property comes along.

Ready to capitalise on Melbourne’s rebound? Axton Finance can help you make the most of today’s conditions. As a trusted Melbourne mortgage broker, we’ll guide you through your options, maximise your borrowing power and structure your loan for long-term success. Call us on 03 9939 7576, email [email protected] or click here to get in touch.

How to use your property’s equity to buy a second home

Posted on 04/07/202512/07/2025 by Hunter Scribe

Keen to buy a second property? Whether it’s an investment townhouse or a beach house, using the equity in your existing home could be a great way to get there without saving a full deposit all over again.

What is home equity and how does it work?

Home equity is the difference between your property’s current market value and the amount you still owe on your home loan.

For example, if your property is worth $850,000 and your outstanding mortgage is $400,000, then your equity is $450,000.

You can build equity in two ways:

Making regular repayments that reduce your home loan balance and/or

Benefiting from property value growth over time

This growing equity can then be used as a resource to fund another property purchase, without needing to save a large cash deposit.

How to use equity to buy a second home

There are two main ways to access your home equity:

Refinancing your current mortgage: This involves taking out a new, larger mortgage on your existing home, which pays off your old mortgage and releases the difference as cash. This cash can then be used as a deposit for your second property.

Taking out a line of credit or home equity loan: This option allows you to access the equity in your home through a flexible line of credit. Generally, lenders will approve you for a set limit, and you can draw down funds as needed, similar to how a credit card works, but with your home as security. You can structure your line of credit so you only have to repay interest on the amount you borrow, making it a useful option for expenses or ongoing investment needs.

Once you’ve accessed the equity, you can use those funds as a deposit for your second home or investment loan. This can be used to buy an investment property, providing rental income and potential capital growth, or to purchase that ideal holiday home for personal use.

How much equity do you need to buy a second property?

Most lenders in Australia require you to retain at least 20% equity in your existing home before approving additional borrowing. This is known as usable equity.

Calculating usable equity

Let’s say your home is worth $850,000 and you owe $400,000 on your mortgage. Your lender’s policy is that you could potentially borrow up to 80% of the property’s value ($680,000). Subtract what you owe ($400,000) from 80% of the property’s value, and that leaves $280,000 in usable equity.

Lender policies do vary. Some may offer more flexibility around income assessment or require higher or lower loan-to-value ratios. It’s important to speak to an experienced broker or lender to understand your options.

The benefits of using equity to buy a second home

Using your home loan equity to fund a second home can offer several advantages:

No large cash deposit needed: One of the most significant benefits is avoiding the need to save up a substantial cash deposit for your next purchase. You’re using the value you’ve already built in your primary residence.

Potential tax benefits: For investment properties, there can be potential tax deductions on interest and other expenses, making it a more attractive financial strategy. Speak to your accountant about this.

Faster portfolio growth: Equity helps you build wealth sooner by expanding your property assets.

Lower interest rates: Using your home equity through a loan or line of credit often means paying lower interest rates than taking out a separate home loan or saving for a new deposit. This can make accessing your equity a quicker and more affordable way to finance your second property.

The risks and challenges of using equity for a second home

While using equity can be a smart move, there are also potential downsides to consider:

Increased debt: You are essentially borrowing more money against your home, which increases your overall financial commitments and monthly repayments.

Market fluctuations: If property values decline, you could find yourself in a position where you owe more than your property is worth, known as negative equity.

Impact on lifestyle: Higher mortgage repayments across two properties could put a strain on your day-to-day finances and affect your disposable income.

Risk of over-leveraging: Borrowing too much against your equity can limit your future financial flexibility and make it harder to access funds for unexpected expenses or other opportunities.

Cross-collateralisation: If your lender ties both properties to the same loan, it could reduce your flexibility. For example, selling one property might require the lender’s approval or impact the loan on the other, making it harder to restructure or refinance later

Before proceeding, it’s wise to run the numbers and get professional advice to make sure the strategy suits your circumstances and long-term goals.

Equity loan vs refinancing: which option is better?

When using equity to buy a second home, you’ll usually choose between two main options: refinancing your existing mortgage or taking out a separate equity loan.

Both approaches use your current property as security, but they work in different ways.

Refinancing involves increasing the size of your existing home loan to release equity. This option can offer lower interest rates and a simpler loan structure, as you’re consolidating your borrowing into one mortgage. However, refinancing may come with fees, such as break costs or new loan setup charges.

A home equity loan, on the other hand, is a separate loan that uses your current home as collateral. It’s often available as either a lump sum or a line of credit and may offer fixed or variable interest rates. This option can give you more flexibility if you want to keep your original mortgage unchanged or need funds for different purposes.

The right option for you depends on your financial goals, how much equity you want to access and the terms offered by your lender. A mortgage broker can help you weigh up the pros and cons based on your situation.

How Axton Finance can help you use equity to buy a second home

At Axton Finance, we help busy, time-poor people unlock the potential of their home equity to purchase a second property. Whether you’re buying a second home as a holiday house or an investment, we’ll guide you through your options and explain the process clearly.

We compare hundreds of loan products from a wide range of lenders to find one that fits your goals. From calculating your usable equity to choosing the right loan structure, we’ll provide expert advice every step of the way.

Thinking about using your home equity to buy a second property? Axton Finance can help. As a trusted mortgage broker near you in Melbourne, we’ll guide you through your options and ensure your loans are structured for long-term success. Call us on today 03 9939 7576, email [email protected] or click here to get in touch.

Cross collateralisation explained – how it impacts your home and investment loan

Posted on 30/06/202504/07/2025 by Hunter Scribe

If you’ve got more than one property or are planning to invest in property, your lender might suggest something called cross-collateralisation. It’s a common lending strategy, but one that comes with risks you need to understand.

Cross-collateralisation allows you to unlock equity in your existing properties without selling, but it also links your properties together in a way that can limit your flexibility.

What is cross-collateralisation?

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Cross-collateralisation is when the same lender uses more than one property as security for a single loan, or for multiple loans that are linked across multiple properties. It means your lender can have a claim over several properties instead of just one.

For example, say you purchased your first home with a home loan through a mortgage broker in Melbourne. Later, you decide to invest in a second investment property and secure an investment property loan. If your lender cross-collateralises these properties, they will register a mortgage over both your primary residence and your investment property to secure both the loan for your home and the loan for your investment property. You can actually borrow 100% plus costs this way with a single loan if you have the equity available!

This also means you’re leveraging equity to grow your portfolio. But cross-collateralisation ties your properties together in a way that reduces your flexibility.

Why cross-collateralisation can limit your flexibility

One of the biggest drawbacks of cross-collateralisation is how it limits your ability to sell, refinance or restructure without involving all your properties and the bank’s assessment of the entire picture each time you make a decision.

If you decide to sell one of the properties in your cross-collateralised portfolio, you can’t just sell it and pocket the proceeds. You’ll need to get the lender’s approval, which usually triggers revaluations of any remaining properties, and they might use the sale to reassess your loan terms. They might even keep some or all of the proceeds to reduce your overall loan balance.

This kind of restriction can be frustrating for borrowers who want to:

Refinance one property for a better deal
Sell a property to free up cash
Renovate or improve one part of their portfolio

Working with an experienced investment property loan broker can help you structure your loans in a way that supports flexibility and long-term growth.

Pros and cons of cross-collateralisation

Like any lending strategy, cross-collateralisation has its benefits and drawbacks. Here are some key points to consider:

Pros

1. Helps unlock equity quickly

Using the equity in one property can make it easier to secure finance for another without needing a large cash deposit or multiple loan applications to achieve the same thing across two or more lenders.

2. Creates simplicity

Some borrowers find it simpler to manage multiple loans under one lender, especially if they are new to property investment.

3. May improve borrowing power

By securing your loan across multiple properties, lenders may be more willing to offer a higher loan amount than if each property were assessed individually and with different lending polices applied.

Cons

1. Less flexibility when exiting

As explained, selling, refinancing or restructuring one property becomes more complex when it’s tied to others. Lender approval is required, and you may not receive all the sale proceeds if they need you to reduce your remaining loan balances.

2. Limited choice of lenders

If your properties are cross-collateralised, it can be difficult to switch just one loan to a different lender to get a more favourable interest rate or different terms. You might have to refinance all your loans simultaneously, which can be a complex and costly exercise.

3. Increased exposure to risk

If the value of one of your properties decreases significantly, it can impact the equity available across all your properties. This could lead to a situation where you owe more than the combined value of your properties.

What are the alternatives?

The alternative to cross-collateralisation is keeping your loans and securities separate. This approach is sometimes called “standalone” or “non-cross-securitised” lending.

With standalone lending:

Each loan is secured by just one property usually up to 80% of its value but up to 95% in some circumstances

You can refinance, sell or restructure without affecting other properties
You keep more control over your portfolio

A qualified mortgage broker can help you assess whether standalone or cross-collateralisation suits your strategy. It depends on your goals, equity, income and future plans.

Speak to an experienced mortgage broker before you decide

For some borrowers, cross-collateralisation can help unlock equity and support faster portfolio growth. But it’s not right for everyone and it’s something you should go into with your eyes open.

Before you agree to link your loans or properties, speak to a home loan broker who understands how to structure lending for the long term. An expert mortgage broker in Melbourne who clients trust will help you weigh the pros and cons, assess your risk, and explore smarter ways to use your equity.

Thinking about using cross-collateralisation to grow your property portfolio? Axton Finance can help. As a trusted mortgage broker in Melbourne, we’ll guide you through your options and make sure your loans are set up for long-term success. Call us on today 03 9939 7576, email [email protected] or click here to get in touch.