As a public servant looking at buying a home, you'll discover that the type of property you choose can significantly impact your home loan application and the loan amount you can access. Different property types come with varying levels of risk for lenders, which affects everything from your loan to value ratio (LVR) to whether you'll need lenders mortgage insurance (LMI).
Standard Residential Properties
Most public servants start their property journey with standard residential homes - houses, townhouses, or units in established areas. These properties typically offer:
• Access to home loan options from banks and lenders across Australia
• Standard interest rate options including both variable interest rate and fixed interest rate products
• Higher borrowing capacity due to lower perceived risk
• Potential for interest rate discounts through your public service employment
When applying for a home loan on a standard residential property, lenders view these as lower risk investments. This means you might qualify for a higher loan amount and potentially avoid LMI with a smaller deposit.
Apartments and Unit Complexes
Unit living appeals to many public servants, particularly those working in city centres. However, lenders assess apartments differently:
• Some lenders have restrictions on building height or apartment size
• Properties in complexes with high investor ratios may face lending restrictions
• Your financial situation will be assessed against the building's overall profile
• Strata reports become crucial in the application process
Before you get pre-approved, ensure your chosen apartment meets your lender's criteria. Some buildings may limit your home loan options or affect your home loan interest rate.
New vs Established Properties
The age of your property influences both your borrowing capacity and costs:
New Properties:
• May qualify for First Home Owner grants, reducing stamp duty burden
• Some lenders offer specific products for new builds
• Construction loans may be required, affecting the application process
• Sunset clauses and completion risks need consideration
Established Properties:
• Immediate settlement allows for standard loan products
• Property history provides lenders with more confidence
• Renovation potential may affect loan amount calculations
• Building and pest reports influence lender decisions
Ready to get started?
Book a chat with a Finance and Mortgage Brokers at Public Home Loans today.
Investment Properties
Public servants often consider investment properties due to job security. Investment home loans differ from owner-occupier loans:
• Higher interest rates apply compared to owner-occupied properties
• Larger deposits typically required (often 20% minimum to avoid LMI)
• Rental income calculations affect borrowing capacity
• Tax implications influence your overall financial situation
When calculating home loan repayments for investment properties, factor in the higher rates and additional costs like property management fees.
Rural and Regional Properties
With many public service roles in regional areas, rural properties present unique considerations:
• Some lenders have postcode restrictions
• Valuation challenges in smaller markets
• Longer settlement periods may be required
• Specialist rural lenders might offer more suitable products
The property market in regional areas can be less liquid, affecting both your home loan pre-approval amount and the lender's willingness to finance.
Unusual Property Types
Some properties require specialist consideration:
• Properties on large blocks (over 2 hectares)
• Houses with commercial elements
• Heritage-listed buildings
• Properties with granny flats or dual occupancy
These properties often require specialist lenders and may affect your access to standard home loan rates.
Maximising Your Property Choice
Regardless of property type, public servants can optimise their position by:
• Maintaining organised bank statements and financial records
• Understanding how different properties affect LVR calculations
• Considering features like offset accounts to reduce interest payments
• Exploring both variable home loan rates and fixed interest rate home loan options
• Building home equity through strategic property choices
The streamlined application process available to public servants can make accessing finance more straightforward, but property type still influences your options. Whether you're looking at a city apartment or regional family home, understanding these differences helps you make informed decisions about both your property purchase and financing structure.
Your property choice affects more than just your lifestyle - it influences your entire financial framework including loan terms, rates, and long-term wealth building potential. Taking time to understand these connections ensures your property investment aligns with your career and financial goals.
Call one of our team or book an appointment at a time that works for you to discuss how your chosen property type might affect your home loan options and application process.
