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Last Updated: 24th May, 2024

Key Points

  • Borrow up to 95% of a property’s value.
  • Overtime income and Higher Duties Allowance wages accepted.
  • Secondary and primary teachers can get waived LMI.
  • Be in your role for at least 6-12 months.

  • How Much Can Teachers Borrow?

    If you’re a teacher, we know you may find it difficult to get home loan approval because most banks don’t understand how to assess your income over a year. Luckily, not all lenders have this issue; some will fight for your business. Our Home Loan Experts know which lenders can help, and would be happy to help you find the best one for your situation. We can help you:

    • Borrow up to 95% of the property value: You’ll need a clean credit file, regular income (casual teachers are accepted), and you’ll need to buy a standard residential property in a metro location.
    • Borrow up to 110% of the property value: A guarantor loan allows you to borrow 100% of the property value plus the purchase costs.
    • Negotiate interest rates: We have strong relationships with major banks and lenders, so we get to negotiate with them to work on getting a a competitive interest rate for you.

    Call 1300 889 743 or fill in our free online enquiry form to discover if you qualify for a teacher home loan.

    90% LVR, No LMI For Teachers

    A lender on our panel is offering waived LMI on a 90% Loan-to-Value (LVR) home loan for primary and secondary teachers. There is no minimum income requirement.

    To qualify for no LMI on a 90% LVR home loan:

    • You must buy a residential property (Only Category 1 and 2 locations accepted)
    • You need a minimum of $5,000 genuine savings over six months. Rent paid via lease agreement is accepted as genuine savings.
    • You do not require a university degree
    • The maximum loan amount is $1.35 million for metro locations and $1 million for non-metro locations.
    • For joint applications, either applicant can be a teacher to qualify for waived LMI.

    What is waived LMI?

    LMI stands for Lenders Mortgage Insurance, which the homebuyer normally pays the lender when borrowing more than 80% of the property value. As a teacher, however, you can borrow up to 90% of the property value without paying LMI.

    Here’s how much you save on LMI fees:

    Property ValueLoan AmountLVRPremium Saved
    $700,000$630,00090%$15,674
    $800,000$720,00090%$17,913
    $900,000$810,00090%$20,152
    $1 million$900,00090%$22,392

    *Results from our Home Loan Experts’ LMI calculator, based on a new purchase of a home as a primary place of residence in the state of New South Wales.

    Are you ready to save thousands of dollars on your home loan? Call us on 1300 889 743 or enquire online for free today.

    What Are The Eligibility Requirements For Teacher Home Loans?

    • Must be at least 18 years old.

    • Must be an Australian citizen or permanent resident.

    • Must have a stable employment history in the education sector, typically for at least 6-12 months in your role.

    • Must have a strong income and be able to provide evidence of your income, such as payslips and tax returns, from both your primary and secondary jobs (if applicable).

    Mutual banks offer an additional discount for essential workers. You have to be a member to get the benefits.

    Can Casual/Part-Time Teachers Also Qualify?

    Yes, if you’re a casual or part-time teacher you can indeed qualify for home loan benefits for teachers. Here are some points on how lenders assess your income:

    • Overtime income: Our Home Loan Experts know lenders that will allow 100% of overtime income to be factored into your loan application, which can improve your borrowing capacity.

    • Calculation of casual income: Our Year-To-Date (YTD) calculator projects your casual income for 40-48 weeks based on your earnings so far, to provide a comprehensive view of earning potential.

    With our expertise, we can help you further optimise the loan application process by making sure we follow all the bank’s rules, so you can borrow as much as possible for your situation. Just give us a call at 1300 889 743 or fill out our free online assessment form, and we’ll be in touch to help you.


    What Kinds Of Teachers Or Other Education Professionals Qualify For Discounted Home Loans?

    Positions on the list below qualify for home loans discounted for teachers:

    • Pre-Primary school teacher

    • Primary school teacher

    • Secondary school teacher

    • Special needs teacher

    • Special education teachers

    • University lecturer

    • University tutor

    • Vocational education teacher

    • English as a second language teacher

    • School principal


    How Will The Lender Assess My Income?

    When assessing income for teachers, banks are sometimes cautious due to teachers’ unique work structure. They typically consider only 40-48 weeks of income annually to account for holiday breaks. Some lenders may accept overtime income.

    They may also accept as income the higher wages paid under the Higher Duties Allowance (HDA), which dictates a higher wage for teachers who take on higher-grade tasks and responsibilities. This can enhance borrowing capacity.

    Lenders also evaluate factors like employment status, liabilities and credit score. Teachers may need to provide tax returns, financial statements and payslips as proof of income.

    One of our lenders accepts 100% of overtime income for primary and secondary teachers. Call us at 1800 889 743 to find out if you qualify.

    Understanding The Higher Duties Allowance

    As a teacher, it’s important to make sure you choose a lender that will accept as much of your income as possible when assessing your loan application. One source of income to focus on getting accepted is the HDA.

    Experienced teachers taking on additional responsibilities alongside their teaching duties might be eligible for the HDA. This supplements their base salary to reflect the increased workload and commitment.

    A prime example of this is when a teacher is promoted to year co-ordinator, which often comes with a higher salary or an HDA. Getting the bank to accept your higher income can increase your borrowing power for a home loan. As long as you can provide an employment letter from the principal stating that this new position is ongoing, along with two payslips showing your new income, some lenders will accept 100% of this new income.


    Required Documents For Applying For Teacher Home Loans

    To apply for a home loan as a teacher in Australia, you will need to provide the following documents:

    • Home loan application: Complete a home loan application form and send it to the lender with supporting documentation.

    • Identification: Provide documents such as a driver’s licence, passport or other acceptable forms of ID.

    • Employment letter: You may be required to provide a letter of employment to prove your current and upcoming employment status, including your employment history, role and any future employment contracts.

    • Payslips: Provide payslips for the past three months to demonstrate consistent income.

    • Bank statements: Provide bank statements for the past three months to show regular salary credits.

    • Purchase contract: If the application involves a purchase of a property, provide the purchase contract.

    • Savings statements: Provide statements to show your savings history.

    You can also check out our Application Document Checklist for a more extensive list of required documents.


    What If I Am Teaching As A Second Job?

    You can include income from a second job as a teacher when applying for a home loan. It’s common for teachers, particularly those employed on a casual basis, to work a second job to supplement their income.

    Perhaps you work as a tutor on the side, focusing on particular specialities like maths or English. This may be on a contract or freelance basis with other public schools, through a private education provider or as a self-employed tutor.

    Generally speaking:

    • The second job needs to be in the same line of work so a role as a tutor will typically be accepted.

    • Some lenders will accept 100% of your income if you can show that you have a 6- to 12-month work history and have been earning a regular income.

    • If you’re self-employed, you need to have been working for at least 2-3 years and provide your tax returns, Notices of Assessment (NOAs) and an accountant’s letter to verify your income.

    • Some lenders will consider approval with less than three months’ work history if you’re in a strong financial position with a clear credit history.

    • It’s best to provide all of your income evidence from both roles, including payslips and tax returns, up front.

    Our Home Loan Experts can let you know if lenders will accept your second-job income for your teacher home loan application. Call 1300 889 743 or complete our free online enquiry form today.


    What If I’m A Teacher On Probation?

    Teacher home loans are available even if you’re still on probation.

    However, note that you’ll need to meet all other standard lending criteria and have a clear credit history.

    If you’re borrowing more than 90% Loan to Value Ratio (LVR), you may need to provide additional supporting documents to get loan approval.


    FAQs About Teacher Home Loans

    How Do I Get A Bank To Accept 100% Of My Overtime Income? add_circle remove_circle

    Some lenders can consider 100% of a teacher’s overtime income as part of their assessment – and our Home Loan Experts can tell you which ones! Generally, you’ll need to provide a letter from your employer confirming that you’ve received overtime income for the past year. You’ll also need to provide your two most recent payslips and a group certificate.

    Can I Get Help With My Home Loan During The School Holidays? add_circle remove_circle

    During the school term, you’re busy planning classes and marking homework, so you may not have time to search for a property, speak to a real-estate agent or start your home loan application. When you do have time to speak to a professional or need an employment letter to prove your income, agents are on holiday and the school is closed.

    Sound familiar? Luckily, the HR department of most schools is open during school holidays and can help you retrieve documents that you need. Most schools also have online payroll systems that allow you to login to take a screenshot of your income and employment evidence. Be sure when you take a screenshot that your name and employment details are visible, otherwise the bank may not accept it as proof.

    Similarly, if your employment contract will be signed over the Christmas holidays, most teachers can contact their principals to provide an employment letter confirming that your contract will be renewed for the coming school year. Provide your principal with an employment letter template to make the home loan application process easy.

    Am I Eligible For 85% LVR With Waived LMI? add_circle remove_circle

    Teachers are highly sought after by lenders because they have stable employment, which means a regular income. Because of this, some lenders will allow you to borrow up to 85% of the property value and waive the cost of Lenders Mortgage Insurance (LMI). LMI is charged by most lenders when borrowing more than 80%, as a way of minimising their loss if you default. It can cost you about $9,500 when borrowing 85% on an $800,000 property.

    Do You Qualify For 85% LVR With No LMI?

    • You must not be borrowing more than 85% LVR.

    • Your loan size must not exceed $1,500,000.

    • Your credit file must be free of negative marks.

    • You must have a strong income.

    • You must have stable employment with a good work history (typically 6-12 months in your role).

    • You must be purchasing a property (refinances accepted on a case-by-case basis).

    Try the LMI calculator to discover how much you could save.

    What Can I Use The Home Loan For? add_circle remove_circle

    You can take out a mortgage for buying a home, investing, refinancing or construction. Lenders also may accept other loan purposes, such as debt consolidation, on a case-by-case basis.


    Explore The Possibilities Of A Teacher Home Loan Today!

    Whether you’re a casual teacher, part-time lecturer or school principal, we’re here to assist you every step of the way. We share your passion for making a difference. Our home Loan Experts have seven years of experience, on average, as mortgage brokers. They will help you explore teacher home loan options and guide you towards home ownership.

    Call us at 1300 889 743 or fill out our free online assessment form to get started now. Let’s make your dream of owning a home a reality together!