Home Loans for Defence Personnel

Frequently Asked Questions by Defence Personnel

What is DHOAS?

The Defence Home Ownership Assistance Scheme (DHOAS) is an Australian Government scheme that helps eligible serving and former Australian Defence Force (ADF) members buy a home. It pays a monthly subsidy towards the interest on your home loan.

You become eligible after 2 years of continuous permanent service, or 4 years of effective Reserve service. The longer you serve, the bigger the subsidy:

Other rules to know:

• The loan must be with an approved provider. Currently these are Australian Military Bank, Defence Bank and NAB.
• You must live in the home for at least 12 months.
• DHOAS can be used for buying or building a home, buying land, or renovating.

Can Defence personnel get no LMI home loans?

DHOAS doesn’t waive Lenders Mortgage Insurance (LMI) by itself. Defence members do have other ways to avoid it:

• 5% Deposit Scheme: first home buyers can buy with a 5% deposit and no LMI, with no income cap.
• Family Home Guarantee: single parents can buy with a 2% deposit and no LMI.
• Guarantor loans: a family member uses their property as extra security.
• Lender offers: some lenders have offered reduced LMI or special terms for Defence members.

You can often combine DHOAS with the 5% Deposit Scheme if your lender takes part in both. That can mean a small deposit, no LMI and a monthly subsidy all on the same loan.

Can reservists apply for home loans?

Yes. Reservists can get home loans like any other borrower, and many can access DHOAS too. To qualify for DHOAS, you need 4 consecutive years of effective Reserve service, which means at least 20 paid days each year. You also need to build up one year of service credit before payments start.

For the home loan itself, lenders look at your civilian income and your Reserve pay. Some lenders count regular Reserve pay as income if you have a steady history.

Can veterans qualify for Defence lending?

Often, yes. Former ADF members who built up DHOAS eligibility while serving can apply for one final subsidy certificate after they leave. Since January 2023, there’s no longer a deadline to use it. The old limit was five years.

The tier you keep depends on your length of service:

• Left before 20 years of service: you receive Tier 1 payments.
• 20 or more years of service: you keep the Tier 3 level.

Veterans can also use all the standard first home buyer schemes if they’re eligible.

Are Defence allowances included as income?

Many are, but it depends on the lender and the allowance. Lenders often count regular, ongoing allowances such as the Service Allowance, sometimes in full.

Allowances that will stop when you buy or move, such as Rent Allowance, are usually not counted. Temporary allowances, such as deployment allowances, may also be excluded or only partly counted.

Your payslips and a PMKeyS statement help show which allowances are ongoing. Choosing the right lender can make a big difference to your borrowing power.

Can DVA pensions be used for servicing?

In many cases, yes. Some lenders accept Department of Veterans’ Affairs (DVA) payments as income, such as the Disability Pension or War Widow(er)’s Pension, if they’re ongoing. Because some DVA payments aren’t taxed, some lenders also gross them up when they work out your income. That can boost your borrowing power.

Lenders usually want to see a recent DVA income statement. Their policies vary a lot, so it’s worth comparing lenders if DVA payments are a big part of your income.

Can Defence members buy investment properties?

Yes, but DHOAS can’t be used for an investment property. The subsidy is only for a home you live in, and you need to live there for at least 12 months.

Many Defence members still invest. Some buy their own home first with DHOAS and later rent it out, or use equity to buy an investment. Before you do, it helps to know about the 2026 tax changes. For established homes bought after 12 May 2026, rental losses can’t be used to reduce tax on your wages from 1 July 2027. New builds keep the existing rules. Speak with your accountant before you buy.

How much can Defence personnel borrow?

It depends on your income, allowances, expenses, debts and deposit. Lenders check that you could still afford repayments if your interest rate went up by 3%. With the cash rate at 4.60% after four rises in 2026, that test is harder to pass than it was a year ago.

Some lenders also take the DHOAS subsidy into account, and getting your allowances counted properly can lift your borrowing power further. A broker can show you a realistic range across lenders.

Can serving members refinance?

Yes. Refinancing can help Defence members get a lower rate, release equity or combine debts. DHOAS has its own rules, though. The subsidy is for buying, building or renovating, not for a standard refinance. Your loan also needs to stay with an approved DHOAS provider to keep receiving payments.

If you already receive DHOAS, check with DVA and your broker before you switch lenders, so you don’t lose your subsidy by accident.

Why use a Defence-experienced mortgage broker?

Defence finances have their own rules: DHOAS tiers, approved providers, allowances, postings, Reserve pay and DVA payments. A broker with Defence experience can:

• Check your DHOAS eligibility and tier
• Combine DHOAS with schemes such as the 5% Deposit Scheme
• Make sure your allowances and DVA income are counted properly
• Plan around postings and deployments
• Handle the paperwork, even when you’re away on service

For most home loans, using a broker costs you nothing, because the lender pays the broker.