Current and former serving members of the Australian Defence Force can apply for unique Defence Force Home Loans and receive monthly subsidies as part of the Defence Home Ownership Assistance Scheme.
Eligible borrowers can get a home loan and subsidies through 1 of 3 lenders participating in the scheme: Defence Bank, Australian Military Bank and NAB.
DHOAS subsidies and eligibility
The Defence Home Ownership Assistance Scheme has 3 subsidy tiers based on the length of your service. The minimum length of service is 4 years permanent service or 8 years in the reserves.
You must have served within the last 5 years to apply for the DHOAS.
There are also subsidy limits based on your loan amount. This information is contained in the table below, but check the DHOAS website for the most up-to-date figures.
DHOAS subsidy tiers and service length 2021-22
Please note that the actual monthly subsidy amounts depend on the median interest rate, which changes over time.
|1||4 years||8 years||$310,937||Up to $181|
|2||8 years||12 years||$466,406||Up to $272|
|3||12 years||16 years||$621,874||Up to $362|
You'll also need to show the lender a valid DHOAS subsidy certificate.
What if I have taken a break from service?
If you take a break from the ADF for a year or more before the qualifying period is up, then you will need to restart the procedure from the moment you return, regardless of whether you are a permanent member or a reservist.
DHOAS lenders offering defence loans
Only 3 Australian lenders offer loans as part of the Defence Home Ownership Assistance Scheme.
- NAB. One of Australia's largest banks, NAB has branches and ATM networks that cover most of the country.
- Defence Bank. This is a customer-owned bank that started life as a credit union for ADF members, but it now offers services to all Australians. Defence Bank offers a range of home loans, including DHOAS loans.
- Australian Military Bank. This bank started in 1959 and offers various financial services to ADF personnel. This includes 3 DHOAS home loan products.
How to apply for the DHOAS
There are several steps to apply for a DHOAS loan and a subsidy.
- Apply for a DHOAS subsidy certificate via the DHOAS website. You'll need this to prove to your lender that you can qualify for a defence loan. You'll need to attach a copy of your relevant ADO Service Record (long version).
- Once you have the subsidy certificate, you can apply for a loan through 1 of the 3 providers mentioned above.
Home loan approval
Aside from the service criteria, you will also need to meet the lender's eligibility requirements for the loan. This is the same with any other home loan.
- Deposit. You'll need to have saved at least a 5% deposit. Some lenders may require a deposit as high as 20% of your property's value.
- Loan amount. The amount you wish to borrow affects your eligibility for the loan. Lenders won't lend you an amount they feel is so high that you can't comfortably afford to repay it.
- Income and expenses. The lender will examine your income, spending, debts and assets to get a full picture of your finances. This is to make sure you can repay the loan.
Other grants and schemes for ADF personnel
You can combine a DHOAS loan with other home buyer schemes and policies.
Home Purchase Assistance Scheme (HPAS)
The HPAS offers a one-off payment of $16,949 to help with the cost of buying a home if you've been posted to a new location and are living there for at least 12 months.
First home owner grants and concessions
There are state and territory plus federal government schemes and policies that are available to you if you are a first home buyer. You may be able to qualify for multiple grants or other schemes in addition to the DHOAS.
Some examples include the following:
- First home owner grants. This is a grant of money that can be used towards your purchase and is often reserved for first home buyers purchasing newly built properties.
- Stamp duty concessions. Many governments waive or discount stamp duty for first home buyers, removing one of the bigger property costs.
- The Family Home Guarantee. Under the Family Home Guarantee, eligible single parents can buy homes with 2% deposits and avoid lenders mortgage insurance (LMI) costs while borrowing the remaining 98%.
- The First Home Loan Deposit Scheme. This scheme allows first home buyers to enter the market with a 5% deposit. They can also avoid LMI costs.
How do banks view my allowances?
Most service men and women get some nice benefits and allowances to help pay the costs they may incur if they are posted overseas. However, some banks aren’t willing to take these allowances into account, whether because they don’t understand them or simply because they feel it’s too risky. The problem is that this can significantly limit you in terms of how much money you can borrow.