Simple hacks to buy a two bedroom property in Kew

Two bedroom properties in Kew typically suit first home buyers who want access to established amenities without the maintenance load of a house.

Kew sits close to the CBD with established schools, parks like Studley Park, and the Eastern Freeway for connectivity. Two bedroom apartments and units in the area appeal to professionals and couples entering the market. The decision often comes down to deposit size, loan structure, and whether the stamp duty concession applies.

Full stamp duty exemption applies up to $600,000

Victoria offers a full transfer duty exemption on properties valued up to $600,000 for eligible first home buyers. A sliding scale concession applies on properties valued from $600,001 to $750,000. You must move into the property within 12 months of settlement and live there for at least 12 continuous months as your principal place of residence.

Consider a buyer purchasing a two bedroom unit valued at $580,000 in Kew. The full exemption eliminates transfer duty entirely. For a property valued at $680,000, the concession reduces the duty payable but does not remove it completely. The exemption applies to both new and established homes, which means you can access it whether you purchase an apartment in a new development or an older unit in an established block.

Deposit options start at 5% with the Australian Government scheme

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance. Housing Australia guarantees the difference between your deposit and 20% of the property value. The scheme has no income caps and no annual place limits. Applications are made through a participating lender, not directly to Housing Australia.

In Victoria, the property price cap is $950,000 for capital city and regional centres. Both the purchase price and the lender's assessed value must be at or below that cap. If you are purchasing a two bedroom property in Kew at the suburb's current median, you would typically fall within the cap. The scheme can be combined with the Victorian stamp duty exemption or concession, which reduces the upfront cost further.

Variable or fixed rates depend on your cashflow tolerance

A variable interest rate moves with the market and typically includes access to an offset account. A fixed interest rate locks in your repayments for a set term, usually between one and five years, but may limit access to offset or redraw features depending on the lender. Some lenders offer a split loan structure, where part of the loan is fixed and part is variable.

In our experience, buyers who expect income growth or irregular income patterns often prefer the flexibility of a variable rate with full offset access. Buyers with tighter cashflow or less tolerance for rate movements may lock in a portion of the loan. The decision should reflect your income stability and how you plan to manage surplus cash. Your home loan application should include a discussion of these features with your broker before you commit to a loan structure.

LMI can be added to the loan or paid upfront

If you are not using the Australian Government 5% Deposit Scheme and you have less than a 20% deposit, Lenders Mortgage Insurance will apply. LMI protects the lender if you default on the loan. The cost varies depending on your deposit size and the lender's risk assessment. You can pay LMI upfront at settlement or capitalise it into the loan amount.

As an example, a buyer purchasing a two bedroom unit in Kew with a 10% deposit and a purchase price at the median would incur LMI. If the premium is capitalised, it increases the total loan amount and the interest paid over the life of the loan. If paid upfront, it reduces the loan amount but requires additional cash at settlement. Some lenders offer discounted LMI premiums for certain professions or loan structures, which is worth confirming during the pre-approval process.

Offset accounts reduce interest without changing the loan balance

An offset account is a transaction account linked to your home loan. The balance in the offset account reduces the principal on which interest is calculated. If you have a loan of $500,000 and $20,000 in your offset account, you pay interest on $480,000. The loan balance remains $500,000, but the interest charged each month is lower.

This feature suits buyers who maintain a buffer in their transaction account or who receive irregular income such as bonuses or commissions. The interest saved compounds over time. Offset accounts are typically available on variable rate loans but may be restricted or unavailable on fixed rate loans depending on the lender. Confirm the availability of this feature before finalising your loan structure.

Help to Buy is available in Victoria with income limits

Help to Buy allows the Australian Government to contribute up to 30% of the purchase price for an existing home in exchange for a proportional equity stake. You need a minimum 2% deposit. Income limits are $100,000 for individuals and $160,000 for joint applicants or single parents. Property price caps vary by location and are confirmed via the postcode search tool at firsthomebuyers.gov.au.

Help to Buy cannot be combined with the Australian Government 5% Deposit Scheme, but it can be used alongside the Victorian stamp duty concession. If you qualify under the income limits and the property falls within the price cap, the scheme reduces the deposit and loan amount required. You retain the option to buy out the Government's share at a later date, with the buyout price reflecting the property's value at that time.

Call one of our team or book an appointment at a time that works for you. Traj Finance works with clients in Kew and surrounding areas to structure loan applications that reflect your income, deposit, and property choice. We compare lender policies on offset accounts, LMI, and government schemes to identify the loan structure that aligns with your circumstances.

Frequently Asked Questions