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Military Home Loan

Have you been posted overseas in the armed forces?

You may be a soldier in the army, an air traffic officer working in the air force, or an electronic warfare sailor in the navy.

As part of your role, you may be required to work overseas, receiving attractive allowances and benefits.

But can you include these as part of your income to get a home loan? Please read on to find out.

How much can you borrow?

If you are an Australian military worker that has a good income and has been serving in the military for a significant amount of time, you may be entitled to borrow between 90 to 95% of the purchase price!

But what if the lender tells you that you can’t afford the loan on your current income? Read on to find out how you can make your allowances count!

Do I need a deposit?

Most banks require that you have a 5% deposit. You may be eligible for the Home Purchase Assistance Scheme (HPAS) and First Home Owners Grant (FHOG). These will help towards the purchase price.

There are also no deposit loans available for those using a guarantor to guarantee the loan.

How do banks view my allowances?

You may incur a variety of expenses as a result of being posted overseas in the military.

Consequently, most service men and women are eligible for attractive benefits and allowances that help to pay these associated costs.

The problem is that some lenders don’t understand or take into account your allowances. This means that your borrowing capacity may be significantly reduced!

Will lenders accept my army allowances?

Defence Force workers are eligible to receive a number of allowances, however not all banks will accept them.


  • Defence Service Accommodation subsidy: If you are living at a base you may receive an allowance to live in Defence Housing Authority accommodation. We know lenders that will include this allowance.
  • Private rent allowance: If you are renting privately you will receive a rental allowance to help pay for the cost of your accommodation. However, every lender has a different policy and not all banks will include this allowance.
  • Uniform allowance: If you are being paid an allowance to help pay for your clothing and uniform, most banks can include this.

Why won’t the banks accept my rental allowance?

Some banks have more conservative lending policies and as such, will not accept your rent allowance for private accommodation. This is because Defence Housing Australia subsidises the rent on a monthly basis, whereas military personnel are paid fornightly.

This causes complications for some banks that simply don’t understand how allowances work. Luckily, we know lenders that may include this allowance.

Please call us on 1300 889 743 or enquire online and we can help you make your military benefits count towards a home loan.

Will the banks include my lump sum payments?

The government provides a variety of lump sum payments to those in the military, however not all banks will take these payments into account.

  • Returned from combat overseas: If you have served as a soldier, you may be paid a sizeable lump sum for your service. These payments are usually tax free and as such, will not be included by the banks.
  • During your overseas posting: If you have worked for the Department of Defence at an overseas base and have been paid a bonus for your work, some banks will consider this. However, it depends on whether this income is ongoing.

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 actually reflect your true annual earnings.

Alternatively, your salary whilst on a job overseas may be different to 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 back 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 cannot 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.

Are any military purchase schemes or subsidies available?

There are two primary schemes available to Australian Defence Force (ADF) members. These include:

  • 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.
  • Home Purchase Assistance Scheme (HPAS): Under this scheme, ADF members are paid a one off taxable lump sum amount. This is intended to help pay for the costs of taking out a home loan, including application and conveyancing fees.

You may be eligible for both! To check whether you qualify for this assistance, please contact the ADF directly.

Which lenders will approve my loan with a scheme?

There are certain DHOAS home loan providers that can include the scheme that you receive from the Defence Force.

They can then assess the amount that you qualify to borrow.

Note that not all major banks and lenders will lend to Defence Force members that are on the scheme.

The trick to getting your home loan approved is by applying with the right bank!

We know which banks approve DHOAS scheme borrowers so speak to us today on 1300 889 743 or enquire online and one of our mortgage brokers will get back to you.

How can I apply for a home loan from overseas?

This depends on whether you are simply working at a base or actually in combat:

  • Working at the military base: You may be an engineer, a technician, a cook, a metal smith or a health officer. Whatever role you are 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 are on a naval ship the documents can be emailed or faxed to you through secured communication. Most lenders do not 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 a tour generally can’t confirm their exact location, for obvious security reasons. As such, most banks will accept a POA.

Do I need to certify the documents?

No. If you are in Australian barracks the documents do not need to go to a consulate or an embassy. This is because the barracks are considered as Australian soil, despite being overseas.

Can you 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 a great 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 a variety of duties and roles which help 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 have been enlisted to combat, develop intelligence or assist in supporting the armed forces, you may be a part of the:

  • Army
  • Navy
  • Airforce

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:

  • Environmental science
  • Law
  • Engineering
  • Planning and management
  • Law
  • Human resources

Short term or long term posting?

If you are serving in the Australian Defence Force (ADF) your posting may be considered long-term if you are 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.

Home loans for military workers!

Are you a member of the Australian Defence Force who has been posted overseas? 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 and let us help you get approval!

  • Yvette

    I believe I can qualify to borrow at 95% on this but what I’d really like is to get some sort of interest rate discount. Are there any rate discounts on offer or do we need to meet specific criteria to qualify?

  • Hey Yvette,

    Generally, to qualify for an interest rate discount on a 95% home loan, you’ll have to be borrowing more than $250,000 to buy property (but less than $1 million), have a clean credit history and prove that you have stable employment. You can check out the 95% LVR home loans page for more info: