The short version
- Lenders see public sector jobs as stable, which helps your application.
- Some lenders count salary packaged income grossed up, lifting what you can borrow.
- Member-owned banks that began serving police, teachers or government staff often offer them discounts.
If you are in a government job, lenders see your job as secure, which counts in your favour. Some lenders, often mutual banks that serve public sector workers, offer government employees special home loan interest rates and discounts on Lenders Mortgage Insurance (LMI).
If you are a government employee or public servant, here's what you need to know before applying.
LMI waivers and discounts
LMI waivers
Most people who apply for a home loan are required to take LMI if their deposit is less than 20% LVR. There are no general LMI waivers for government employees with the big banks, although a few lenders offer discounts or waivers to some public sector workers, such as police, paramedics or senior public servants.
Where a waiver is offered, it is usually for borrowing up to 85% or 90% LVR.
Special discounts
As a government employee you may be able to get:
- Discounted interest rates that are not advertised to the general public, provided you are getting a loan above a certain limit.
- Exceptions to lender credit policies.
- Potential to borrow more, but this may depend on your individual circumstances, your income, and the lenders' credit policies.
- Use of salary sacrifice in assessment to help you leverage higher borrowings.
Eligibility criteria
Here's what a typical public servant must have in order to qualify.
- Payslips to prove your current income.
- Evidence of any salary packaging or fringe benefits you receive.
- A clear credit report with no late payments in your recent history.
- Proof of stable employment. Some lenders may give preference to federal and state government employees over those in local government employment. Others may apply similar eligibility criteria for all who work in public sector jobs.
There are no specific income eligibility criteria for government employees because of the wide range of pay levels within the public service.
Alternative options
While these alternatives are not specifically meant for government employees, you may qualify for them depending on your situation. These and other government schemes may help with the cost of buying a home.
First Home Owner Grant (FHOG)
This scheme is run and funded by the states and territories. It offers a one-off grant to first home owners satisfying eligibility criteria. Amounts and conditions vary by state and territory, and in most states the grant is now only paid on a newly built home, up to a price limit. The ACT no longer has a grant. Check your state or territory revenue office's website for details.
The 5% Deposit Scheme
The government's 5% Deposit Scheme (formerly the First Home Loan Deposit Scheme) lets first home buyers buy with a deposit as low as 5% and no LMI, because the government guarantees up to 15% of the loan. Since 1 October 2025 there are no income limits and no cap on the number of places for first home buyers, and single parents earning up to $125,000 can buy with a 2% deposit. The home must be under a price cap that depends on where you buy.
Visit Housing Australia's website, formerly the National Housing Finance and Investment Corporation (NHFIC), for more information on the scheme and other home purchase support schemes.
Considerations
Investment property
LMI waiver thresholds and discounts when purchasing a second home or investment property vary between lenders. Consult your bank or mortgage broker about what is available for you. Some professional packages may also include LMI waivers and discounts.
Defence Housing Australia investment property
DHA has investment opportunities for a range of investment properties across the nation. Properties include townhouses, units, and houses.
For DHA investment properties you may:
- Borrow up to 90% or 95% of the property value with LMI, depending on the lender.
- Borrow up to 90% without LMI with some lenders that offer waivers for DHA properties.
- Borrow up to 100% of property value with a guarantor.
- Have more of the rental income counted than usual. DHA charges a property management fee, often around 16.5% of the rent, and some lenders count the rest of the guaranteed rent in full.
If you are a Defence Force member buying a DHA property, keep in mind that your entitlements may be affected if you have been posted to the same location as your investment property.
Is a professional package right for you?
Professional packages are for those who wish to borrow larger amounts, often $150,000 or more, and want other facilities beyond a home loan, for example a transaction account or a credit card. Some packages may offer favourable terms for investment properties.
Consider working with a mortgage broker
Mortgage brokers work with many lenders and have the ability to offer you a wide range of home loan options. An experienced mortgage broker can save you time and help find the most advantageous deals for government employees, including LMI waivers and special discounts on interest.