Getting your foot in the door of the property market as a bricklayer can feel like a massive step, but understanding variable rate loans and the power of extra repayments might just be the key to making homeownership more achievable than you think.
As tradies, we often have irregular income patterns - busy periods followed by quieter times. This makes variable rate loans particularly attractive because they offer flexibility that aligns with how we actually earn our money.
Understanding Variable Interest Rates for Bricklayers
A variable interest rate moves up and down based on market conditions and lender decisions. Unlike fixed rates that stay the same for a set period, variable rates can change, which means your repayments can fluctuate.
For bricklayers, this flexibility can be advantageous because:
• You can make extra repayments without penalty during busy work periods
• You'll benefit immediately when interest rates drop
• Many variable loans come with features like offset accounts
• The loan amount requirements are often more flexible
When you're buying your first home as a bricklayer, understanding your borrowing capacity is crucial. Variable rate loans often provide more options for tradies with seasonal income variations.
The Power of Extra Repayments
Making extra repayments on your home loan can dramatically reduce both the time it takes to pay off your mortgage and the total interest you'll pay. Here's how it works:
If you have a $500,000 loan at a 6% variable interest rate over 30 years, your regular repayment would be around $2,996 per month. By adding just $500 extra each month, you could:
• Save over $150,000 in interest
• Pay off your loan 7 years earlier
• Build equity faster in your property
As a bricklayer, you might have periods where work is plentiful and cash flow is strong. These are perfect opportunities to make those extra repayments that will pay dividends down the track.
Ready to get started?
Book a chat with a Finance & Mortgage Brokers at Tradie Home Loans today.
First Time Home Buyer Programs for Tradies
The Australian government recognises that tradies are essential workers and has created several first time home buyer schemes to help you enter the property market:
Home Guarantee Scheme: This allows eligible first home buyers to purchase with as little as 5% deposit without paying lenders mortgage insurance (LMI). For bricklayers earning good money but struggling to save a 20% deposit, this can be a game-changer.
First Home Owner Grants (FHOG): Depending on your state, you might be eligible for grants ranging from $10,000 to $45,000, plus potential stamp duty concessions.
The Home Guarantee Scheme is particularly valuable for tradies because it recognises that having a smaller deposit doesn't necessarily mean you're a higher risk borrower - especially when you have stable trade skills and income potential.
Maximising Your Variable Rate Loan Benefits
To get the most out of your variable rate loan as a bricklayer, consider these strategies:
Offset Account Setup: Link a transaction account to your home loan where your salary gets deposited. The balance in this account offsets the loan balance for interest calculation purposes.
Regular Review: Variable rates change, so it's worth reviewing your loan regularly. Having access to Home Loan options from banks and lenders across Australia means you can compare and potentially refinance if conditions improve elsewhere.
Payment Frequency: Consider fortnightly repayments instead of monthly. This simple change results in 26 payments per year instead of 12 monthly payments, effectively giving you an extra month's repayment annually.
Application Process for Bricklayers
When applying for a home loan as a bricklayer, lenders will want to see:
• Bank statements showing consistent income
• Tax returns (usually last two years)
• ABN details if you're self-employed
• Proof of any apprenticeship completion or trade qualifications
The streamlined application process through specialist brokers who understand the trades industry can make this much more straightforward. We know how to present your financial situation in the most favourable light to lenders.
If you're self-employed, check out our specific guidance for self-employed tradies to understand additional documentation requirements.
Understanding Loan to Value Ratios and LMI
Your loan to value ratio (LVR) is crucial in determining whether you'll need to pay lenders mortgage insurance. If you're borrowing more than 80% of the property value, LMI typically applies.
However, some lenders offer interest rate discounts for lower LVRs, and there are specific programs for bricklayers that might provide more favourable terms.
For tradies looking at their first investment property down the track, understanding how LVR works with your primary residence can help you plan your property portfolio expansion strategy.
Getting Pre-Approved
Before you start house hunting, getting pre-approved gives you confidence about your budget and shows sellers you're a serious buyer. The pre-approval process typically takes a few days and involves a thorough assessment of your financial situation.
Pre-approval is particularly important in the current property market where auction clearance rates remain strong, and you need to act quickly when the right property comes up.
Variable rate loans with extra repayment capabilities offer bricklayers the flexibility to manage their mortgage in line with their income patterns while building wealth faster through accelerated equity growth.
Call one of our team or book an appointment at a time that works for you to discuss how variable rate loans and extra repayments can help you achieve your homeownership goals.
