Do you know variable rate loan terms for first home buyers?

As a FIFO mining engineer looking to buy your first home, understanding variable rate loan terms can make a real difference to your financial situation. Variable interest rates move up and down with market conditions, which means your repayments will change over time.

What are variable rate home loans?

A variable interest rate loan is one where the interest rate can change during the life of your loan. Unlike fixed interest rates that stay the same for a set period, variable rates fluctuate based on economic factors and lender decisions. This means your monthly repayments can go up or down.

For FIFO workers, variable rates often come with more flexibility than fixed options. You can usually make extra repayments without penalties, which is perfect when you receive those higher FIFO pay packets during your roster periods.

Key features to look for

When applying for a home loan with a variable rate, consider these important features:

• Offset account: Links to your home loan and reduces interest on the amount in the account
• Redraw facility: Lets you access extra repayments you've made
• Interest rate discounts: Many lenders offer discounts off their standard variable rate
• No monthly account fees: Some packages waive ongoing fees
• Flexible repayment options: Make weekly, fortnightly, or monthly repayments

Having access to banks and lenders nationwide means you can compare these features across different loan products to find what suits your circumstances.

Understanding loan to value ratio (LVR)

Your loan to value ratio affects your interest rate and whether you'll pay lenders mortgage insurance (LMI). If you borrow more than 80% of the property value, you'll typically need to pay LMI. However, some LMI waivers for FIFO workers may be available depending on your profession and the lender.

For mining engineers, some lenders recognise your stable income and may offer better LVR terms or waive LMI at higher ratios.

First home buyer benefits and schemes

As a first-time buyer, you can access several government schemes:

• First home owner grants (FHOG): Cash grants for eligible new home purchases
• First Home Guarantee Scheme: Allows you to buy with as little as 5% deposit without paying LMI
• Stamp duty concessions: Reduced or waived stamp duty in most states
• First time home buyer programs: State-based schemes offering additional support

These first time home buyer schemes can significantly reduce your upfront costs when buying your first home.

The application process for FIFO workers

When you apply for a home loan as a FIFO mining engineer, lenders will assess your borrowing capacity based on your income and expenses. You'll need to provide:

• Recent payslips showing your FIFO income
• Bank statements from the last 3-6 months
• Employment contract or letter
• Details of your roster pattern
• Tax returns if self-employed

The streamlined application process with specialist FIFO lenders means they understand your unique income structure and can assess your application accordingly.

Getting pre-approved

Before you start house hunting, it's worth getting pre-approved for your home loan. This tells you exactly how much you can borrow and shows sellers you're a serious buyer. Pre-approval typically lasts 3-6 months, giving you time to find the right property.

For FIFO workers, pre-approval is particularly valuable because it accounts for your variable roster income and gives you confidence in the property market.

Investment loan options

Once you've bought your first home, you might consider buying your first investment property. Variable rate investment loans work similarly to owner-occupier loans but typically have slightly higher interest rates. The benefit is that investment loan interest is usually tax-deductible.

Many FIFO workers find that their higher incomes make investment properties an attractive option for building wealth.

Making the right choice

Choose a variable rate loan when you:

• Want flexibility to make extra repayments
• Prefer access to features like offset accounts
• Believe rates might fall in the future
• Want the option to refinance without break costs

Variable rates suit many FIFO mining engineers because they align with the flexibility of FIFO work patterns and higher income periods.

Remember that buying a home is a significant financial commitment. Take time to understand all the loan terms, compare different packages, and consider how the loan amount and repayments fit your budget during both working and non-working periods.

With the right variable rate loan and support from experienced mortgage brokers who understand FIFO work, you'll be well-positioned to achieve your homeownership goals. Call one of our team or book an appointment at a time that works for you.