Smart tips to tackle housing affordability for FIFO workers

The Australian property market continues to challenge many workers, but FIFO fixed plant operators face unique circumstances that can actually work in their favour when applying for a home loan. Your FIFO income structure and employment arrangements create both opportunities and considerations that standard mortgage applications don't always address properly.

Understanding Your Borrowing Capacity as a FIFO Worker

Your borrowing capacity depends heavily on how lenders assess your income. As a FIFO fixed plant operator, your pay structure often includes:

• Base salary plus allowances
• Overtime and penalty rates
• Living away from home allowances (LAFHA)
• Travel allowances

Lenders across Australia have different approaches to FIFO income assessment. Some may only consider your base salary, while others will include allowances that have been consistent over time. Having your bank statements organised and showing regular patterns of income helps demonstrate your financial situation to potential lenders.

Home Loan Options Available to FIFO Workers

You can access home loan options from banks and lenders across Australia, but not all products suit FIFO circumstances. Consider these loan features:

Variable Interest Rate Loans: These fluctuate with market conditions and often come with offset account options. An offset account can be particularly valuable for FIFO workers who might have irregular spending patterns or want to park their allowances to reduce interest.

Fixed Interest Rate Home Loans: These provide certainty with your repayments, which can help with budgeting during your roster periods. You'll know exactly what your home loan interest rate will be for the fixed period.

Combination Loans: Some lenders offer split loans where you can have both variable home loan rates on one portion and a fixed interest rate on another.

Managing the Loan to Value Ratio and LMI

Your loan to value ratio (LVR) significantly impacts your loan amount and whether you'll pay lenders mortgage insurance (LMI). If you're borrowing more than 80% of the property value, LMI typically applies.

FIFO workers often have higher savings rates due to reduced living expenses during roster periods. This can help you:

• Build a larger deposit to avoid or reduce LMI
• Improve your LVR and potentially access interest rate discounts
• Demonstrate strong savings habits to lenders

The Application Process and What You'll Need

The home loan application process requires documentation that reflects your employment situation. Lenders will typically request:

• Recent payslips showing your full income breakdown
• Bank statements covering several months
• Employment contract or letter confirming your FIFO arrangements
• Tax returns and group certificates
• Details of your living expenses both at home and during roster periods

Getting pre-approved before you start property hunting gives you clarity on your budget and shows sellers you're a serious buyer. Home loan pre-approval is particularly important in the current property market where properties can move quickly.

Calculating Home Loan Repayments and Managing Costs

When calculating home loan repayments, factor in the additional costs of buying a home:

• Stamp duty (varies by state)
• Legal and conveyancing fees
• Building and pest inspections
• Ongoing property maintenance while you're away on roster

Consider how your repayments align with your roster schedule. Some FIFO workers prefer to set up repayments to come out during their work periods when they're earning full allowances.

Building Home Equity Over Time

As a FIFO worker, you might have opportunities to build home equity faster than other borrowers. Your potentially higher income and lower living expenses during work periods can allow for:

• Additional repayments to reduce the principal faster
• Using an offset account effectively
• Considering investment property opportunities down the track

Working with FIFO-Experienced Lenders

Not all lenders understand FIFO employment arrangements equally well. Some banks and non-bank lenders have specific policies for FIFO workers and understand how to assess your income correctly. This can make a significant difference to your borrowing capacity and the interest rate you're offered.

The streamlined application process becomes particularly important when you're on roster and have limited time to deal with paperwork and phone calls during business hours.

Housing affordability doesn't have to be an insurmountable challenge. With the right approach to your home loan application and understanding of your options, homeownership can be within reach. Your FIFO income structure, while complex, can actually demonstrate strong earning capacity to the right lenders.

Ready to explore your home loan options? Call one of our team or book an appointment at a time that works for you, even if you're currently on roster.