Your FIFO career has been building towards this moment – you're ready to upgrade your family home. Whether you're looking at a bigger backyard for the kids, an extra bedroom, or simply a property in a location that suits your lifestyle, understanding your home loan options is crucial.
Understanding Your Borrowing Capacity as a FIFO Worker
As a FIFO worker, your financial situation differs from traditional nine-to-five employees. Banks and lenders across Australia are increasingly recognising FIFO income, but the application process requires specific documentation. Your borrowing capacity depends on several factors:
• Consistent employment history in the FIFO industry
• Regular bank statements showing steady income deposits
• Current loan amount and existing debt commitments
• Your loan to value ratio (LVR) on the new property
A Home Finance & Mortgage Broker who specialises in FIFO applications can help you present your income in the most favourable light to lenders. They understand which lenders are FIFO-friendly and can access home loan options that might not be available through direct bank applications.
Choosing Between Fixed and Variable Interest Rates
When upgrading your family home, you'll need to decide between fixed interest rate home loan options and variable home loan rates. Each has distinct advantages:
Fixed Interest Rate Benefits:
• Certainty in your repayments for the fixed period
• Protection against interest rate rises
• Easier budgeting, especially important during roster breaks
Variable Interest Rate Advantages:
• Potential to benefit from interest rate drops
• Often comes with offset account options
• More flexibility for additional repayments
Many FIFO workers choose a combination, splitting their loan amount between fixed and variable portions. This approach provides some certainty while maintaining flexibility.
Calculating Home Loan Repayments and Managing LVR
When calculating home loan repayments for your upgrade, consider your current home equity. If you've owned your current property for several years, you might have built substantial equity. This equity can be used towards your new home purchase, potentially reducing your loan to value ratio (LVR) and avoiding lenders mortgage insurance (LMI).
An LVR below 80% typically means you won't pay LMI, which can save thousands of dollars. Your mortgage broker can run scenarios showing different loan amounts and their impact on your overall financial position.
The Home Loan Application Process for FIFO Workers
Applying for a home loan as a FIFO worker involves a streamlined application process when you work with specialists who understand the industry. Here's what you'll typically need:
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Employment Documentation
• Current employment contract
• Roster schedules
• Letter from employer confirming ongoing employment -
Financial Records
• Bank statements from the past three to six months
• Tax returns and payment summaries
• Details of existing debts and commitments -
Property Information
• Purchase contract or property details
• Estimated stamp duty costs
• Building and pest inspection reports
Getting Pre-Approved Before You Buy
Home loan pre-approval is particularly valuable in today's property market. It gives you confidence when making offers and shows sellers you're a serious buyer. For FIFO workers, pre-approval also allows your mortgage broker to address any potential issues with lenders before you find your dream home.
The pre-approval process involves submitting your home loan application and having it assessed by the lender. Once approved, you'll know exactly how much you can borrow and can shop within your confirmed budget.
Interest Rate Discounts and Offset Accounts
Many lenders offer interest rate discounts for various reasons – professional packages, large loan amounts, or existing banking relationships. Your mortgage broker can negotiate these discounts on your behalf.
Offset accounts are particularly valuable for FIFO workers. During your working periods, you can deposit funds into the offset account, reducing the interest charged on your home loan. This flexibility suits the irregular cash flow patterns common in FIFO work.
Making Your Upgrade Decision
Upgrading your family home is a significant decision that goes beyond just buying a home – it's about improving your family's lifestyle and building long-term wealth. Consider factors like:
• School catchment areas if you have children
• Proximity to family and support networks
• Property market conditions in your preferred areas
• Your long-term career plans in the FIFO industry
Working with mortgage brokers who understand FIFO workers means you'll have access to specialised knowledge about which lenders are most supportive of FIFO applications and what home loan interest rate options are available.
Your FIFO income provides opportunities that many traditional workers don't have – higher earning potential and the ability to build equity quickly. With the right home loan structure and professional guidance, upgrading your family home can be a smooth process that sets your family up for long-term success.
Call one of our team or book an appointment at a time that works for you, even if you're currently on site. We understand FIFO schedules and can work around your roster to help you secure the right home loan for your family's next chapter.
