6/9 Mastering DHOAS. Tips for success
Welcome back to “Understanding Your ADF Housing Entitlements,” where we’re dedicated to empowering your financial journey. Lets shine a spotlight on the Defense Home Ownership Assistance Scheme (DHOAS) – a card that can significantly transform your property game and help you pay down your mortgage faster.
The DHOAS Advantage: Loan Subsidy and Lump Sum
The DHOAS scheme operates with a dual approach, comprising a loan subsidy and a lump sum component. Let’s dive into the loan subsidy first.
To access DHOAS, you need to have served in the ADF, completed a Qualifying Period of Service, and accrued a Service Credit. While the qualifying period varies for permanent members (two consecutive years) and reservists (four consecutive years of effective reserve service), this information is based on thresholds effective as of February 2023.
Your DHOAS Service Credit is calculated by subtracting your qualifying period from your total years of ADF service. This credit, along with your DHOAS home loan and scheme criteria fulfilment, enables you to claim the DHOAS subsidy.
Navigating DHOAS Tiers and Benefits
The DHOAS is divided into three tiers based on your length of service, with corresponding subsidy tiers and limits:
Minimum service of 2 years (permanent) or 4 years (reserve)
Subsidised Loan Limit – $402,159
Minimum service of 4 years (permanent) or 8 years (reserve)
Subsidised Loan Limit – $603,238
Minimum service of 8 years (permanent) or 12 years (reserve)
Subsidised Loan Limit – $804,318
These figures evolve with time, so be sure to check the latest values at https://www.dhoas.gov.au/.
Maximising Your DHOAS Subsidy
The DHOAS subsidy is calculated on 37.5% of interest incurred on your eligible home loan amount over 25 years, based on the Australian home lenders’ median interest rate. This subsidy gets better with time, and you can receive it as long as you’re serving in the ADF. Even after separation, you can access unused entitlements.
By reaching Tier 3 before claiming, you ensure you receive the full rate and optimise your subsidy usage. If you’re on Tier 3, you could receive $1,042 per month as a subsidy, an impactful $200+ per week for an investment property.
Stay tuned, next we’ll explore the DHOAS Lump Sum component – an opportunity that can significantly bolster your financial foundation.
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