As a WA Government employee, you're in a strong position to access Investment Loan options from banks and lenders across Australia. Your stable employment and regular income make you an attractive borrower, especially when it comes to buying an investment property. Let's explore how variable rate investment loans can help you start or expand your investment property portfolio.
Understanding Variable Rate Investment Loans
A variable interest rate on your investment property loan means the interest rate can move up or down based on market conditions and your lender's decisions. Unlike fixed interest rates that remain unchanged for a set period, variable rates offer flexibility that can work in your favour when rates fall.
For WA Government employees looking to invest in real estate, variable rates often come with features that fixed rates don't offer. These might include offset accounts, redraw facilities, and the ability to make extra repayments without penalties.
Why Choose Variable Rates for Investment Properties
When buying a rental property, variable rates can provide several advantages:
• Flexibility: Make extra repayments when your finances allow
• Rate reductions: Benefit immediately when interest rates drop
• Loan features: Access to offset accounts and redraw facilities
• No break costs: Switch lenders without exit fees typically associated with fixed rates
The current property market shows that many investors prefer variable rates for their investment loan options, particularly when they're unsure about future rate movements.
Investment Property Types and LVR Considerations
Whether you're considering a townhouse, apartment, or stand-alone dwelling, your loan to value ratio (LVR) will significantly impact your borrowing terms. Most lenders require a lower LVR for investment properties compared to owner-occupier loans.
For investment properties, you'll typically need:
• Minimum 20% deposit to avoid lenders mortgage insurance (LMI)
• Higher deposit may qualify you for interest rate discounts
• Strong borrowing capacity to service both your home loan and investment loan
When you research property options, consider how the rental yield will affect your overall investment strategy. Properties with strong rental yields can help offset the higher interest rates typically charged on investment loans.
Ready to get started?
Book a chat with a Finance and Mortgage Brokers at Public Home Loans today.
The Application Process for WA Government Employees
Applying for an investment loan as a WA Government employee involves several steps. Your stable employment with the WA Government works in your favour during the application process.
You'll need to provide:
• Recent bank statements (usually three months)
• Payslips and employment verification
• Details of your intended investment property
• Information about your current debts and expenses
• Proof of your deposit and genuine savings
The streamlined application process for government employees often means faster approval times and access to exclusive interest rate discounts not available to other borrowers.
Calculating Investment Loan Repayments
When calculating investment loan repayments, remember that Investment Loan Interest Rates are typically higher than owner-occupier rates. However, as a government employee, you may qualify for preferential pricing.
Consider these factors when determining your loan amount:
• Your current borrowing capacity
• Ongoing rental income from the property
• Stamp duty and other purchase costs
• Potential for negative gearing benefits
• Your overall property investment strategy
Building Your Investment Property Portfolio
If this isn't your first investment property, you might be looking at expanding your property portfolio. Variable rates can provide the flexibility needed to refinance or restructure your loans as your portfolio grows.
Many WA Government employees start with a single rental property and gradually build their investment holdings. The key is ensuring each property adds value to your overall investment strategy while maintaining serviceability across all your loans.
Property Investment Loan Features to Consider
When comparing investment loan options, look for features that align with your investment goals:
• Offset accounts: Link transaction accounts to reduce interest charges
• Redraw facilities: Access extra repayments when needed
• Interest-only options: Maximise cash flow in the early years
• Portability: Transfer your loan to a new property if you sell
These property investment loan features can make a significant difference to your long-term returns and cash flow management.
Making Your Investment Loan Application
When you're ready to proceed with your investment loan application, having all your documentation prepared will help ensure a smooth process. As a WA Government employee, you can also explore whether you qualify for LMI waivers or other benefits specific to public servants.
Consider getting a loan health check if you already have existing loans, as this can help you understand your overall borrowing position before adding an investment property loan to the mix.
Variable rate investment loans offer WA Government employees an excellent opportunity to build wealth through property investment. With your stable employment and regular income, you're well-positioned to secure competitive rates and favourable loan terms.
Remember, successful property investment requires careful planning and the right loan structure. Consider your rental yield expectations, understand the implications of negative gearing, and ensure your chosen property aligns with your long-term investment strategy.
Call one of our team or book an appointment at a time that works for you to discuss how variable rate investment loans can help you achieve your property investment goals.
