If you’re serving in the military, your pay and benefits could help you buy a home sooner than you think. Lenders accept your regular salary, housing allowances, and overseas posting benefits when assessing your home loan application. Whether you’re in the Army, Navy or Air Force, your service comes with financial advantages that work in your favor. Special home loan programs exist specifically for defence personnel, with lenders who understand military pay structures and posting requirements. You may be eligible to purchase property right now, even if you’re currently deployed or stationed overseas.
How Much Can You Borrow?
If you’re an Australian military worker with a good income and serving in the military for a certain amount of time, you may be entitled to borrow between 90 to 95% of the purchase price.
This high loan-to-value ratio (LVR) makes homeownership more accessible, especially for first-time buyers. However, the exact amount you can borrow depends on:
- Your income stability: Lenders prioritize consistent, ongoing income over temporary allowances.
- Service length: Longer service periods can enhance your eligibility for certain schemes.
- Lender policies: Not all lenders are familiar with ADF-specific benefits, so choosing the right one is critical.
Do You Need A Deposit?
Most lenders require a minimum 5% deposit for a home loan. However, you have access to unique schemes that can reduce or even eliminate this requirement:
- Home Purchase Assistance Scheme (HPAS): This scheme provides a one-off taxable lump-sum payment to help cover costs like application fees, conveyancing, and other expenses associated with purchasing a home.
- Defence Home Ownership Assistance Scheme (DHOAS): This is available to members currently and formerly serving in the military. This scheme provides monthly payments to assist both current and former members in paying their home loan. Eligibility for this scheme depends on the length of time served.
- First Home Owners Grant (FHOG): If you’re a first-time buyer, you may qualify for this grant to offset the purchase price.
- No-Deposit Loans with a Guarantor: If you have a family member willing to act as a guarantor, you could secure a loan without a deposit, borrowing up to 100% of the property value.
- Army
- Navy
- Airforce
- Environmental science
- Law
- Engineering
- Planning and management
- Law
- Human resources
To confirm your eligibility for these schemes, speak with one of our mortgage brokers who can guide you through the process.
Is your income ongoing?
Most banks have conservative lending policies when it comes to bonus income. This is because a bonus or a once-off lump sum payment does not reflect your true annual earnings.
Alternatively, your salary whilst on a job overseas may be different from the pay you receive when you return from your posting.
For example, you may have been posted overseas in the military for 6 months. During this time, you may be earning $20,000 a month from both salary and allowances.
When you complete your posting, you will return to your normal salary of $70,000 a year.
As such, lenders are reluctant to include these funds in a serviceability calculation!
How can I get my military income included?
Most banks can’t include your overseas income, unless we can give them a good reason why it should be.
This is why you should speak to us! We know which lenders have flexible lending criteria and can consider your allowance as part of your income. Enquire online or call us on 1300 889 743 to talk to a qualified mortgage broker.
Can I get a Defence Housing loan?
Those in the military who have both a high rank and salary may be eligible for a Defence Housing loan.
This is an excellent way for defence force personnel to own their first home as the loans are available at a heavily discounted rate!
This government initiated loan is available through the Defence Housing credit union that has an agreement with one of the major banks.
Can I get a second mortgage on my Defence Housing loan?
Yes! We know major lenders that will allow you to take out a second mortgage, behind your Defence Housing loan.
You may be eligible to borrow up to 95% of the property value! Call us today on 1300 889 743 or enquire online to find out how you can get approval for a second mortgage with one of the major lenders.
What departments are there in the Defence Force?
Employees of the Defence Force Australia take on various duties and roles to support and build vital infrastructure.
Some officers may be involved in actual military operations. Others may simply be monitoring systems, or providing health care or hospitality to those serving in the army.
If you’ve been enlisted to combat, develop intelligence or assist in supporting the armed forces, you may be a part of the:
What kind of people work in the Defence Force?
Being part of the Defence Force is about more than just being a soldier or sailor!
Australian Defence Force personnel who are posted around Australia or overseas take on a variety of roles ranging from providing legal assistance to implementing military equipment.
The Defence Force typically employs people from the following disciplines to work on their bases:
Short term or long term posting?
If you’re serving in the Australian Defence Force (ADF), your posting may be considered long-term if you’re working overseas for over six months.
In this case, you may be entitled to receive many attractive benefits and allowances.
These aim to help with the cost of relocating and setting up residence overseas, as well as compensating for any undue hardship experienced whilst being posted.
You may also be eligible for a home loan subsidy, depending on your level and length of service.
Are you a member of the Australian Defence Force?
Please contact us, and we can help arrange a home loan for you.
We know which lenders will consider your allowances and other benefits, helping you increase your borrowing capacity.
Call us on 1300 889 743 or enquire online with the button below. GET A FREE ASSESSMENT
Frequently Asked Questions
How Can I Apply For A Home Loan From Overseas?
This depends on whether you’re simply working at a base or actually in combat:
- Working at the military base: You may be an engineer, a technician, a cook, a metalsmith or a health officer. Whatever role you’re in, you can still apply for a home loan from overseas! Any paperwork that needs to be signed can be sent to you directly. If you’re on a naval ship, the documents can be emailed or faxed to you through secured communication. Most lenders don’t accept a Power Of Attorney (POA) in this situation, as you can be located and are generally able to complete all necessary documentation.
- In combat: Officers who are part of covert military operations or on tour generally can’t confirm their exact location for obvious security reasons. As such, most banks will accept a POA.
No. If you’re in Australian barracks, the documents do not need to go to a consulate or an embassy. This is because the barracks are considered Australian soil, despite being overseas.
Which Lenders Will Approve My Loan With A Scheme?
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