How to Choose Variable Rate Loans as SA Public Sector Workers

Buying your first home as a South Australian public sector employee comes with unique opportunities and considerations. Variable rate loans offer flexibility that many first-time buyers find appealing, particularly when combined with the specialised packages available to public service workers.

Understanding Variable Interest Rates

A variable interest rate means your loan repayments can change based on market conditions and lender decisions. Unlike fixed interest rates that stay the same for a set period, variable rates move up and down. This means:

• Your repayments might decrease when rates fall
• You'll have access to features like offset accounts
• Extra repayments are usually allowed without penalties
• You can take advantage of interest rate discounts as they become available

First Home Buyer Programs for Public Sector Employees

SA public sector employees have access to several first time home buyer schemes and benefits:

First Home Owner Grants (FHOG): South Australia offers grants for eligible first home buyers, which can significantly reduce your upfront costs.

Home Guarantee Scheme: This federal program helps eligible buyers purchase with a deposit as low as 5%, potentially eliminating lenders mortgage insurance (LMI).

Stamp Duty Concessions: Various stamp duty reductions or exemptions may apply to your purchase, depending on the property value and your circumstances.

Specialised Public Sector Packages: Many lenders offer tailored packages for government employees, including reduced interest rates and waived fees.

Calculating Your Borrowing Capacity

Your borrowing capacity depends on several factors that lenders assess during the application process:

1. Income Stability: Public sector employment is viewed favourably due to job security
2. Financial Situation: Your existing debts, expenses, and savings
3. Loan to Value Ratio (LVR): How much you're borrowing compared to the property value
4. Bank Statements: Recent statements showing your spending patterns and savings discipline

Public sector employees often have an advantage here due to steady income and employment security, which lenders value highly.

The Application Process

Applying for a home loan involves several steps, but the streamlined application process available through specialist brokers can help:

• Get Pre-approved: This gives you a clear loan amount to work with when house hunting
• Gather Documentation: Pay slips, bank statements, and employment confirmation
• Property Evaluation: Once you find a home, the lender assesses the property
• Final Approval: Complete the remaining paperwork and prepare for settlement

Having access to banks and lenders nationwide means you're not limited to one institution's offerings.

Benefits of Working with Specialist Brokers

Public Home Loans specialises in serving public sector employees, which means:

• Access to home loan options from banks and lenders across Australia
• Understanding of public sector employment benefits and how they impact applications
• Knowledge of first time home buyer programs specific to government employees
• Assistance with investment loan options if you're considering your first investment property
• Guidance through the property market conditions and timing

Planning for Additional Costs

Beyond your loan amount, consider these expenses when buying a home:

• Lenders Mortgage Insurance: May be required if borrowing over 80% of property value
• Stamp Duty: Though concessions may apply
• Legal and Inspection Fees: Essential for protecting your investment
• Moving and Setup Costs: Often overlooked but important to budget for

Making the Most of Variable Rate Features

Variable rate loans often come with valuable features:

Offset Account: Link a savings account to reduce interest charged on your home loan. Every dollar in your offset account reduces the loan balance for interest calculation purposes.

Extra Repayments: Pay more when your financial situation allows, reducing both interest costs and loan term.

Rate Discounts: Take advantage of promotional rates and loyalty discounts as they become available.

As a public sector employee, you're in a strong position to secure favourable loan terms. Your employment stability, combined with the right variable rate loan and available first home buyer benefits, can make homeownership more accessible.

The key is finding the right combination of loan features, interest rates, and government incentives that match your specific circumstances and goals.

Call one of our team or book an appointment at a time that works for you to discuss your first home loan options and how we can help you access the benefits available to SA public sector employees.