Why Should EMTs Consider Variable Rate Investment Loan Costs

As an Emergency Medical Technician, building wealth through property investment can provide financial security for your future. When buying an investment property, understanding the fees and costs associated with variable rate investment loans is crucial for making informed decisions about your property investment strategy.

Understanding Variable Interest Rate Investment Loans

Variable interest rate investment loans offer flexibility that many EMTs find appealing. Unlike fixed interest rate options, variable rates can fluctuate based on market conditions and lender policies. This means your investment loan repayments may change over time, affecting your rental yield calculations and overall investment returns.

When calculating investment loan repayments, consider that variable rates typically start lower than fixed rates but can increase. This impacts your borrowing capacity and determines how much loan amount you can secure for purchasing a town house, apartment, or stand alone dwelling.

Key Fees and Costs to Consider

When applying for a investment loan, several costs will impact your budget:

• Application fees: Most lenders charge between $300-$800 for processing your investment loan application
• Valuation fees: Required for assessing your chosen rental property, typically $400-$800
• Lenders mortgage insurance (LMI): Required when your loan to value ratio (LVR) exceeds 80%
• Legal fees: For property settlement, usually $1,500-$3,000
• Stamp duty: Varies by state and property value, often the largest upfront cost

Lenders Mortgage Insurance Considerations

LMI becomes necessary when your LVR exceeds 80%. For EMTs buying their first investment property, this can add thousands to your costs. However, some lenders offer LMI waivers for healthcare professionals, potentially saving significant amounts on your investment property loan.

Interest Rate Discounts for EMTs

Many lenders recognise EMTs as low-risk borrowers, offering interest rate discounts that can substantially reduce your investment loan costs. These discounts might range from 0.1% to 0.7% off standard variable rates, translating to thousands in savings over your loan term.

When you access investment loan options from banks and lenders across Australia, professional package discounts often apply automatically to healthcare workers, reducing both interest rates and ongoing fees.

Application Process Requirements

The application process for investment loans requires comprehensive documentation:

1. Income verification: Recent payslips and employment contracts
2. Banks statements: Usually three months of transaction history
3. Asset documentation: Details of existing property and investments
4. Property research: Information about your intended investment purchase
5. Rental assessment: Projected rental income from the property

Building Your Investment Property Portfolio

For EMTs considering expanding beyond their first investment property, variable rate loans offer flexibility for portfolio growth. The streamlined application process often becomes more efficient once you establish relationships with lenders who understand your profession and income stability.

When invest in real estate as part of a broader property investment strategy, variable rates allow you to take advantage of rate decreases while maintaining the option to switch to fixed rates if market conditions change.

Negative Gearing Benefits

Buying a rental property often results in negative gearing opportunities, where investment loan interest and property expenses exceed rental income. This creates tax deductions that can benefit EMTs in higher tax brackets, though you should consult with tax professionals to understand implications for your specific situation.

Choosing the Right Property Investment Loan Features

Modern investment loan options include features that enhance flexibility:

• Offset accounts: Reduce interest charges by offsetting savings against your loan balance
• Redraw facilities: Access to additional payments you've made
• Interest-only periods: Typically available for 1-5 years to maximise tax deductions
• Split loan options: Combine variable and fixed portions

These features can significantly impact your long-term investment returns and should align with your property investment strategy.

Variable rate investment loans offer EMTs flexibility and potential savings when structured correctly. Understanding all associated fees and costs ensures you make informed decisions when buying an investment property. The property market rewards prepared investors who research property options thoroughly and secure appropriate financing.

Call one of our team or book an appointment at a time that works for you to discuss your investment loan options and develop a strategy tailored to your circumstances as an EMT.