Who does what
Four parties share the scheme, and knowing which one decides what saves a lot of wasted phone calls. The scheme’s site says it exists to help the ADF recruit and keep people, which is why the benefit grows the longer someone serves.
| Who | What they do |
|---|---|
| Department of Defence | DVA administers the scheme on its behalf. Defence appointed DVA to that role, appointed the three Home Loan Providers, and it is responsible for policing the scheme’s conditions. |
| Department of Veterans’ Affairs | The Scheme Administrator. It assesses eligibility and entitlement, issues subsidy certificates and makes the monthly payments. |
| The Home Loan Providers | Three lenders with the exclusive right to offer DHOAS home loans, listed on the scheme’s Home Loan Providers page. The scheme says DVA and Defence have no say in how much someone can borrow, the interest rate, or whether the loan is approved. |
| The law | The Defence Home Ownership Assistance Scheme Act 2008 and the Defence Home Ownership Assistance Scheme Regulations 2018. The Act calls the lenders “declared loan providers”. |
How the monthly subsidy is worked out
Every DHOAS payment comes from one formula. The scheme describes it as 37.5% of the median interest expense on the subsidised part of the loan, worked out as if the loan ran for 25 years, whatever the real term or rate of the loan. Two consequences follow, and both surprise people.
Your own interest rate is not used
DVA uses a median interest rate worked out from information on Australian home lenders, capped at 8.95% for the formula. It reviews that rate on the tenth-last business day of each month, so the subsidy moves up and down with it.
The balance on day one of the subsidy counts
The subsidy is worked out on the loan balance when the first subsidy payment is made, up to the tier’s limit, and that stays the basis for the life of the loan unless the subsidy is stopped and restarted. The Act puts it as the lesser of the capital owing “on the first authorisation day” and the borrower’s loan limit.
A balance paid down before the first subsidy payment, by a lump sum or extra repayments, can therefore mean a smaller subsidy for as long as that loan lasts. The scheme warns about exactly this when the first payment is delayed, for example because the home cannot be lived in straight away.
The 2026–27 tiers and limits
Each tier’s subsidised loan limit is a share of an Average House Price that the Minister for Defence determines as at 1 July each year, using information from the Australian Bureau of Statistics. As at 1 July 2026 that figure is $1,139,055. The shares come from the Act, and the dollar figures from the scheme’s site, read in October 2026.
| Tier | Minimum service, Permanent / Reserve | Share of the Average House Price | Subsidised loan limit | Monthly subsidy, at most |
|---|---|---|---|---|
| Tier 1 | 2 years / 4 years | 40% | $455,622 | $583 |
| Tier 2 | 4 years / 8 years | 60% | $683,433 | $874 |
| Tier 3 | 8 years / 12 years | 80% | $911,244 | $1,166 |
The monthly amounts are the scheme’s estimates on the September 2026 median interest rate, and they change when that rate changes: in July and August 2026 they were $588, $882 and $1,176. Check the scheme’s current table before relying on any of them.
The limits that apply are the ones current in the month the first subsidy payment covers, and they stay with that loan even when later years’ limits rise or fall. A loan smaller than the limit is subsidised on its whole balance. Moving up a tier raises the subsidy only if the balance is above the old tier’s limit. Who reaches which tier, and when, is in the eligibility guide.
Three things DHOAS is not
- Not a deposit. Even the optional lump sum is paid into the loan with the first monthly payment, after the loan has been drawn down, and cannot be used up front to buy the house.
- Not loan approval. A subsidy certificate does not entitle anyone to a loan; approval is up to the Home Loan Provider, on its own lending criteria.
- Not a fixed income. The scheme says its payments are not guaranteed to stay the same, that they only supplement mortgage repayments, and that meeting those repayments stays the borrower’s responsibility regardless of the subsidy. A service credit is described as indicative only, not a guarantee of how long payments will last.
Tax: the subsidy is a fringe benefit
The scheme’s site says DHOAS is classed as a reportable expense payment fringe benefit under the Fringe Benefits Tax Assessment Act 1986, so a “grossed up” amount can appear on a member’s payment summary. That reported amount may be counted in income tests for some government payments, such as family tax benefit and the parental income test for youth allowance, and may affect child support and childcare payment arrangements.
There are exceptions, including for a home that is rented out. Because tax matters are complicated, the scheme itself urges members to “seek independent financial advice” on their own circumstances before taking up DHOAS, and points to Services Australia for the effect on payments. The detail is on the scheme’s fringe benefits tax page.
The schemes that came before
DHOAS began on 1 July 2008. Before it there were two Defence home loan subsidies, the Defence Home Owner Scheme (DHOS) and Defence Service Homes (DSH). Time already subsidised under either is subtracted from a DHOAS service credit, and the three schemes together are capped at 20 years of subsidy, or 25 with warlike service. How that subtraction works, step by step, is in the eligibility guide; the first step after that is the subsidy certificate.