FIFO income means you're paid differently, but you're still choosing between the same three home loan structures as everyone else: fixed, variable, or split.
The right choice depends on whether you value certainty over flexibility, and how your roster income stacks up when lenders assess your borrowing capacity.
Fixed Interest Rates: Locking in Your Repayment Amount
A fixed rate means your interest rate and minimum repayment stay the same for a set period, typically one to five years. You know exactly what leaves your account each month, regardless of what the Reserve Bank does.
Consider a FIFO worker on a 2/1 roster earning $140,000 annually who locked in a three-year fixed rate before applying for a home loan. The repayment was $2,180 per month on a $450,000 loan. When variable rates climbed over the following 18 months, the repayment on an equivalent variable loan hit $2,520. The fixed rate protected $340 per month during that period, which mattered when their employer cut back shifts and roster income dropped temporarily.
The downside showed up when they wanted to pay down extra during a good year on site. Most fixed loans cap additional repayments at $10,000 to $30,000 annually. Going over that limit triggers break costs, which can run into thousands of dollars if rates have moved significantly since you locked in.
You also can't link an offset account to most fixed rate loans, so any savings sit in a separate account earning minimal interest instead of reducing the interest charged on your mortgage.
Variable Interest Rates: Flexibility and Offset Access
A variable rate moves with the lender's decisions, which usually track Reserve Bank changes. Your repayment can go up or down, and you get full access to features like offset accounts and unlimited extra repayments.
An offset account is a transaction account linked to your home loan. Every dollar in the account reduces the balance on which interest is calculated. If you have a $400,000 loan and $30,000 in your offset, you only pay interest on $370,000. For FIFO workers who bank large pays during roster-on periods and draw them down between swings, an offset account can cut thousands off your annual interest without locking that money away.
You can also make unlimited extra repayments on a variable loan without penalty. If you clear $15,000 after a solid quarter on site, you can drop the entire amount onto the loan and reduce both the principal and future interest. Some lenders offer redraw, which lets you pull that money back out if you need it later, though conditions vary.
The risk is obvious: if rates climb, so do your repayments. During a rising rate cycle, a variable loan that started at $2,100 per month can push past $2,600 within a year. That matters when you're budgeting around roster changes or planning for time off between contracts.
Split Loans: Dividing Your Loan Between Fixed and Variable
A split loan divides your total borrowing between a fixed portion and a variable portion. You might fix 60% and leave 40% variable, or any other combination that suits your situation.
This structure lets you lock in some repayment certainty while keeping access to an offset account and extra repayment flexibility on the variable portion. If you're holding $20,000 to $40,000 in savings between swings, you can offset that against the variable portion while the fixed portion protects you from rate increases on the majority of your loan.
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The split also reduces break costs if you need to refinance or sell before the fixed term ends. Break costs are calculated on the fixed portion only, so a 50/50 split cuts the potential penalty in half compared to fixing the entire loan.
In our experience, FIFO workers with variable income often split 50/50 or 60/40 in favor of the fixed portion. It's not about hedging your bets, it's about matching the loan structure to your cash flow. You get predictable repayments on the larger portion, and flexibility to manage lump sum pays and savings on the smaller portion.
How Lenders Assess FIFO Income for Different Loan Structures
Lenders assess your borrowing capacity differently depending on your employment type and how long you've been on your current roster. Most will accept 100% of your base salary and 80% of your allowances if you've been with the same employer for at least 12 months and can show consistent roster patterns.
That calculation doesn't change based on whether you choose fixed, variable, or split. What does change is how much buffer the lender applies when stress-testing your repayments. They assess your ability to service the loan at a rate typically three percentage points above the actual rate. A variable loan gets tested at the current variable rate plus the buffer. A fixed loan gets tested at the fixed rate plus the buffer, even though your actual repayment won't change during the fixed period.
If you're applying with a 10% deposit or less, you'll likely need to consider low deposit options and pay Lenders Mortgage Insurance (LMI). The Home Guarantee Scheme can help first home buyers avoid LMI with a 5% deposit, but eligibility depends on income caps and property price limits. For FIFO workers, that often means you're either under the income threshold or you're not, and your loan structure choice won't change that.
Which Structure Suits Your Roster and Savings Pattern
If you're banking $4,000 to $8,000 per swing and spending it down over your time off, a variable loan with an offset account will cut more interest than a fixed rate ever could. The offset saves you interest daily, and you still have access to the cash when you need it.
If your income is stable but you want protection from rate rises while you're locked into a long-term contract, a fixed rate makes sense. You're trading flexibility for certainty, which works if you're not planning to make large extra payments or sell within the fixed term.
If you're somewhere in between, a split loan gives you both. You can structure it to match your savings pattern and risk tolerance without committing entirely to one approach. When you're ready to move forward with a first home loan application, your broker can model different split ratios and show you the repayment difference at current rates.
Call one of our team or book an appointment at a time that works for you. We'll run the numbers on your roster income and show you what each structure looks like on a loan that fits your deposit and borrowing capacity.
Frequently Asked Questions
Can I use an offset account with a fixed rate home loan?
Most fixed rate loans don't allow offset accounts. You can link an offset to the variable portion of a split loan, but not to a fully fixed loan. If you're banking large pays between swings, that's a major limitation of fixing your entire loan.
How much of my FIFO income will lenders count toward borrowing capacity?
Lenders typically accept 100% of your base salary and 80% of allowances if you've been with the same employer for at least 12 months. Your choice of fixed, variable, or split doesn't change how they assess your income, but it does affect how they stress-test your repayments.
What happens if I want to sell or refinance during a fixed rate period?
You'll likely pay break costs, which can run into thousands of dollars if rates have dropped since you locked in. A split loan reduces this risk because break costs only apply to the fixed portion, not the variable portion.
Should FIFO workers fix their entire home loan or split it?
It depends on your savings pattern and risk tolerance. If you bank large pays and want offset access, a split loan or fully variable loan works better. If you want repayment certainty and won't make large extra payments, fixing makes sense.
Can I make extra repayments on a fixed rate home loan?
Most fixed loans allow $10,000 to $30,000 in extra repayments per year. Going over that limit triggers break costs. A variable or split loan gives you unlimited extra repayment capacity without penalty.
