- Steps to calculating subsidy
- Your eligible subsidy tier
- Subsidised loan limits
- DHOAS home loan balance and subsidy
- Formula for calculating subsidy
- Lump sum
- Changes to subsidy amounts
- DHOS-eligible $80,000 subsidised loan limit
- Tables of interest rates, subsidy tiers and values
The amount of your monthly DHOAS subsidy payment will be based on the following:
- Your eligible subsidy tier.
- Your subsidised loan limit, which is determined by your tier level. The subsidised loan limit is the maximum portion of your home loan that attracts a DHOAS subsidy.
- Your DHOAS home loan balance up to your subsidised loan limit. If your home loan is less than your subsidised loan limit your subsidy is calculated on the total of your home loan balance.
The calculation used is 37.5% of median interest expense on the subsidised portion of your home loan, as if it was repayable over 25 years (regardless of the actual length of your home loan or what interest rate you pay).
Changes to monthly subsidy amount
Each month, your subsidy payment can fluctuate based on changes to the median interest rate, as reported by CANSTAR Pty ltd.
If there is a reduction in Australia's home loan interest rates, the median interest rate used to calculate DHOAS subsidies will also reduce. This will result in a reduction in your monthly subsidy payment.
To see the changes in interest rates and monthly subsidy amounts since you commenced receiving subsidy, please see the table for the financial year that your payments started.
In addition to a fluctuation in the median interest rate used to calculate DHOAS subsidies, there are two other reasons that your monthly subsidy amount can change:
- You complete the required service milestone and you go up a tier. Your subsidy will increase if your DHOAS home loan balance is greater than your current tier’s subsidised loan limit. If so, more of your loan can attract a subsidy. If not, your subsidy will not increase.
- You separate, and you have not completed 20 years of effective service at separation. In this case, your tier level will reduce to tier 1. If you have completed 20 years of effective service, you will remain at tier 3.
Maintaining subsidy arrangements
Your subsidy payments will continue, if you choose, as long as your DHOAS home loan remains open and unchanged, you have a service credit and you are meeting the Scheme conditions.
Even though the subsidised loan limits change each financial year, to ensure they keep pace with today’s housing market, your subsidy payments will continue to be calculated on the subsidised loan limits, and your home loan balance, that were applicable at the time your first subsidy payment commenced on your current home loan. For details, please see the table of subsidised loan limits and monthly subsidies payable for the financial year that your subsidy commenced.
If your current subsidy arrangements cease, due to closing or amending your current DHOAS home loan or for another reason, you can reapply and restart subsidy on a new or amended DHOAS home loan, if eligible. Your payments will be calculated on your home loan balance and the subsidised loan limits that apply when your subsidy restarts. This can result in changes to the amount of subsidy you received compared with your previous payments.