Proven Tips to Choose the Right Home Loan Features

Understanding Home Loan Features That Matter

When you're working as a FIFO heavy diesel mechanic, your income structure and work pattern are different from standard 9-to-5 jobs. This means the home loan features you choose can make a real difference to how well your mortgage fits your lifestyle. Let's break down the key home loan features and benefits that can help you achieve home ownership while maintaining financial stability.

Choosing the right home loan isn't just about finding the lowest rates - it's about understanding which home loan products and home loan packages offer features that work with your FIFO roster. The right combination of features can help you build equity, improve borrowing capacity, and create a secure future for you and your family.

Variable Rate vs Fixed Rate: What Works for FIFO Workers?

One of the first decisions when applying for a home loan is choosing between a variable rate and a fixed rate loan. Each option has different benefits depending on your circumstances.

Variable Interest Rate Home Loans

A variable home loan rate changes with market conditions. When you have a variable rate home loan, you'll typically enjoy:

• Flexibility to make extra repayments without penalties
• Access to features like offset accounts and redraw facilities
• Potential interest rate discounts when rates drop
• The ability to switch to a portable loan if you move properties

For FIFO workers who receive substantial overtime or allowances during busy periods, this flexibility to make extra repayments can significantly reduce your loan amount over time.

Fixed Interest Rate Home Loans

With a fixed rate, your interest rate stays the same for a set period (usually 1-5 years). This option provides:

• Predictable repayments for budgeting during your roster cycle
• Protection from interest rate increases
• Certainty around calculating home loan repayments
• Peace of mind about your financial commitments

Many FIFO heavy diesel mechanics find that knowing exactly what their repayments will be helps with managing finances during swing periods.

Split Rate: The Middle Ground

A split loan combines both options - you fix part of your loan and keep part variable. This gives you some rate certainty while maintaining flexibility. It's worth exploring when you compare rates and home loan options.

Interest Only vs Principal and Interest Repayments

Another crucial feature to understand is how you repay your loan.

Principal and Interest

With this standard option, each repayment reduces both the interest charged and the actual loan amount. This approach helps you:

• Build equity in your property from day one
• Own your home outright by the end of the loan term
• Demonstrate stronger financial position for future borrowing

This is typically recommended for your owner occupied home loan where you plan to live long-term.

Interest Only

With interest only repayments, you only pay the interest charges for a set period (usually 1-5 years). Your loan amount stays the same, but your repayments are lower. This can be useful if you need lower repayments initially or when you invest in property.

Many FIFO workers use interest only loans strategically, especially for investment properties. However, remember you'll need to start paying principal eventually, which increases your repayments later.

Offset Accounts: A Powerful Feature for FIFO Income

An offset account is one of the most valuable home loan features for FIFO workers. This is a transaction account linked to your home loan where the balance offsets the interest you pay.

Here's how it works: if you have a $400,000 loan amount and $30,000 in your linked offset account, you only pay interest on $370,000. Your actual loan stays at $400,000, but you're charged less interest.

For FIFO heavy diesel mechanics who accumulate savings during swings, this feature is particularly useful:

• Keep your money accessible for emergencies
• Reduce interest without making permanent extra repayments
• No tax on the "earnings" (unlike a savings account)
• Maintain flexibility for large purchases or time off

Some lenders offer 100% offset (called a mortgage offset or linked offset), while others offer partial offset. Always check which type is included when you access home loan options from banks and lenders across Australia.

Redraw Facilities and Extra Repayments

The ability to make extra repayments and redraw them later provides crucial flexibility. When you're earning well during peak periods, you can pay extra to reduce your interest. If you need funds during quieter times or between contracts, you can redraw what you've paid ahead.

Key points about redraw facilities:

• Not all loans offer free redraw - check the conditions
• Some lenders set minimum redraw amounts
• Fixed rate loans often restrict extra repayments
• This feature helps you adapt to FIFO income fluctuations

Portable Loans: When You Need to Move

A portable loan allows you to transfer your existing home loan to a new property without refinancing. This feature saves you money on:

• Application fees for a new loan
• Potential rate discount loss on your current loan
• Discharge fees from your old property
• Time and paperwork involved in a new home loan application

For FIFO workers who might relocate for different mine sites or projects, portability offers valuable flexibility. Check if your lender charges fees to transfer the loan to a new property.

Understanding Loan to Value Ratio (LVR)

Your LVR affects which home loan features you can access and whether you'll pay Lenders Mortgage Insurance (LMI). The LVR is your loan amount divided by the property value, expressed as a percentage.

For example: borrowing $450,000 to buy a $500,000 property means your LVR is 90%.

How LVR Affects Your Options:

• LVR under 80%: Typically no LMI, access to all features and rate discounts
• LVR 80-90%: LMI applies, but most features still available
• LVR over 90%: Higher LMI, potentially limited features

FIFO workers may qualify for LMI waivers or no LMI loans through certain lenders who understand your occupation.

Home Loan Pre-Approval: Start Strong

Before you start seriously house hunting, getting home loan pre-approval gives you:

• Clear understanding of your borrowing capacity
• Confidence when making offers
• Faster settlement when you find the right property
• Time to compare home loan packages properly

For more details, check out our guide on getting loan pre-approval. This step is particularly important for FIFO workers, as it confirms lenders accept your income structure.

Features That Support Your FIFO Lifestyle

When you apply for a home loan as a FIFO heavy diesel mechanic, prioritise these features:

1. Flexible repayment options - make extra payments during high-earning periods
2. Offset or redraw facilities - manage irregular income patterns
3. Low or no ongoing fees - reduce costs during quieter periods
4. Online account management - access your loan details from site
5. Rate discounts for your occupation - some lenders recognise FIFO workers favourably

Choosing Between First Home Loan and Investment Options

If you're buying your first property, you might access the Home Guarantee Scheme or other government initiatives. These can reduce your deposit requirements and help you achieve home ownership sooner.

For those looking beyond their first home loan, investment loans have different features suited to building wealth through property. The right strategy depends on your goals - whether you want to secure your family's home or invest in property for long-term returns.

Making Your Decision

With so many home loan options available, the key is matching features to your specific situation. Consider:

• Your current and projected income stability
• How long you plan to stay in the property
• Your savings patterns during roster cycles
• Whether you're buying to live in or invest
• Your comfort level with variable interest rate changes

Understanding current home loan rates and conducting a thorough home loan rates comparison helps, but features matter just as much as the rate itself. A loan with a slightly higher interest rate but better features might cost you less overall.

Working with specialists who understand mortgages for FIFO workers means you'll access expertise about which lenders and products suit your occupation. They can help you compare rates and features across multiple lenders to find the right fit.

Your work as a FIFO heavy diesel mechanic provides solid income, and choosing the right home loan features ensures your mortgage works as hard as you do. Whether you're after an owner occupied home loan, looking to expand your property portfolio, or considering home loan refinancing, understanding these features puts you in control of your financial future.

Ready to find a home loan package that matches your FIFO lifestyle? Call one of our team or book an appointment at a time that works for you - even if you're currently on site. We specialise in home loans for FIFO heavy diesel mechanics and understand exactly what features will work for your situation.