The Pros and Cons of Moving Closer to Work

For Australian Defence Force members, the daily commute can significantly impact your quality of life and finances. Whether you're stationed at a base or working at defence facilities, buying a home closer to work offers compelling advantages that extend beyond just saving time.

Financial Benefits of Living Close to Work

Reducing your commute doesn't just save time – it can improve your financial situation in several ways:

• Lower fuel costs and reduced vehicle maintenance
• Decreased parking fees and toll charges
• Potential to downsize to one vehicle per household
• More time for family or side income opportunities

These savings can increase your borrowing capacity when applying for a home loan, as lenders consider your ongoing expenses when calculating home loan repayments.

Understanding Your Home Loan Options

As a Defence Force member, you can access Home Loan options from banks and lenders across Australia. Many financial institutions offer:

• Variable interest rate products with flexible features
• Fixed interest rate home loan options for payment certainty
• Specialist defence member packages with interest rate discounts
• Waived or reduced lenders mortgage insurance (LMI) in certain circumstances

Your loan to value ratio (LVR) will influence which products are available, with some lenders offering up to 95% of the property value without LMI for defence personnel.

The Home Loan Application Process

When you're ready to apply for a home loan, the application process typically involves:

1. Get pre-approved to understand your borrowing capacity
2. Gather required documents including banks statements and employment verification
3. Submit your Home Loan application through a streamlined application process
4. Property valuation and final loan approval

Choosing Your Interest Rate Structure

The property market offers various interest rate options to suit different circumstances:

Fixed Interest Rate Benefits:
• Predictable repayments for budgeting
• Protection against rising variable home loan rates
• Peace of mind during rate fluctuation periods

Variable Rate Advantages:
• Access to offset account features
• Potential to benefit from falling home loan interest rate environments
• Additional repayment flexibility

Many defence members choose a split loan structure, combining both fixed and variable portions.

Maximising Your Property Investment

When buying a home closer to work, consider properties that offer:

• Strong rental potential if you're posted elsewhere
• Good capital growth prospects in the local area
• Access to defence housing benefits if applicable

Utilising home equity from existing properties can help fund your deposit, while an offset account can reduce interest charges on your loan amount.

Getting Your Application Ready

Before starting your Home Loan pre-approval, ensure you have:

• Recent pay slips and group certificates
• Bank statements from the past three months
• Details of existing debts and assets
• Identification and defence service documentation
• Estimated property purchase price and deposit amount

Don't forget to factor in stamp duty and other purchase costs when calculating your total borrowing needs. These costs vary by state and can significantly impact your required loan amount.

Moving closer to work represents more than just a lifestyle change – it's a strategic financial decision that can enhance your work-life balance while potentially improving your long-term wealth position. With the right home loan structure and professional guidance, this move can set you up for financial success.

Ready to explore your options for buying closer to work? Call one of our team or book an appointment at a time that works for you.