Understanding Fringe Benefits and Engineer Salaries

You’re an engineer ready to turn the dream of home ownership into a reality. But with a profession known for its enticing fringe benefits packages, a question pops up: how do these perks affect your borrowing power for a home loan?

Fringe Benefits and the Take-Home Equation

Salary packaging, car allowances, and relocation bonuses – these are fantastic benefits that can significantly boost your overall income. However, they might not directly translate to your take-home pay reflected in your payslip. This can lead to some confusion when lenders assess your eligibility for a home loan.

The Lender’s Lens: What Gets Counted?

The good news is that some lenders in Australia do consider certain fringe benefits when calculating your borrowing capacity. Here’s a breakdown of what might get factored in:

  • Salary Packaging: This allows you to salary sacrifice a portion of your pre-tax income into benefits like private health insurance or meals. While your take-home pay might decrease, a lender might consider a significant portion of the sacrificed amount as part of your assessable income.
  • Car Allowances: Fixed monthly car allowances can be partially included in your assessable income, depending on the lender’s policy. Be sure to check if they require evidence of car-related expenses to justify the inclusion.
  • Relocation Bonuses: These one-time payments are generally not considered as income for borrowing purposes.

The Importance of Transparency: Talk to a Mortgage Broker

Understanding exactly how a lender views your fringe benefits is crucial. A mortgage broker can be your champion in navigating this. They can:

  • Explain lender policies: Different lenders have varying approaches to fringe benefits. A broker can explain how each lender considers your specific benefits package.
  • Package your application effectively: A broker can highlight the stability of your income and the value of your fringe benefits to strengthen your application.

Getting Ready for Your Loan Application

Here are some things you can do to smoothen the home loan process:

  • Gather documentation: Have payslips, tax returns, and benefit package details readily available.
  • Talk to your employer: Get a clear breakdown of your salary packaging contributions and car allowance details.

Owning Your Dream Home: It’s Achievable!

With careful planning and the right guidance, navigating the world of fringe benefits and home loans becomes a breeze. So, speak to a broker, understand your options, and get ready to rev up your journey towards home ownership!