Please note that the Defence Service Homes Lending scheme has been superseded by the Defence Home Ownership Assistance Scheme. Unless you served in the defence forces prior to 15 May 1985 (or in Namibia) this information may not be relevant to you. More information is available on the Defence Home Ownership Assistance Scheme website.

Your guide

In some circumstances, the applicant will not be registered as an owner of the land or home for which assistance is sought. It is possible for Defence Service Homes to assign the eligible person's entitlement to either the provider of the accommodation, or to someone else who is helping to acquire that accommodation. Circumstances include:

  • retirement villages, where no separate title exists for individual units, and
  • granny flats, where the eligible person may be provided accommodation (for example, by a family member) in a detached unit or a room within a home.

Assignment may also occur where a third party is willing to provide alternative suitable security for the loan so that the eligible person's accommodation needs are met. Neither Defence Service Homes nor Westpac Banking Corporation are involved in any private arrangements between the assignor and assignee. A number of issues can arise during assignment, some depending on the individual circumstances of the proposal:

  • An assignee takes full responsibility for repayment of the loan, and the provision of suitable security to the bank.
  • Usual bank fees and lending criteria apply to the assignee's loan application.
  • Retirement village companies are generally unwilling to accept assignment.
  • The Defence Service Homes interest subsidy can be cancelled for a number of reasons. The remaining loan balance would revert to the interest rate then applicable to similar bank loans.

The maximum initial Defence Service Homes loan is $25,000 over a term of 25 years. The interest rate on the loan is capped at 3.75% per year. However, the actual interest rate on the loan is based on an average monthly interest rate of all market lenders, calculated monthly, less 1.5%, or 3.75% whichever is the lower rate. A portable loan is restricted to the limit of the previous loan (excluding Widow/widower Advances, Essential Repairs Advances and Section 18A Advances) at the date of discharge over the balance of the term at the existing interest rate. A loan is portable only if:

  • it was current on or after 9 December 1987 and, if discharged before 9 May 1995, it ran for less than 25 years; or
  • it was current on or after 9 May 1995, with unused limit and term available.

Applicants must apply for both a Application for a Certificate of Entitlement for a Defence Service Homes Subsided Loan and the corresponding Application for Certificate of Assignment for a Defence Service Homes Subsidised Loan. The front page of the assignment application form should have all relevant details completed by the eligible person as the assignor. The assignee, who takes responsibility for the loan, completes the back page of the assignment application form.

All relevant questions on both application forms should be answered and the forms must be signed and lodged with Defence Service Homes. Incomplete answers will slow down the processing of your application.

We cannot issue a certificate of entitlement and certificate of assignment until all our requirements have been met.

Once your eligibility and entitlement have been established, and all our requirements have been met, we will send you both certificates. You should then present them to any Westpac branch.

If Westpac approves the Defence Service Homes loan application, the bank will secure the loan against suitable security provided by the assignee. Westpac will determine the actual amount that can be borrowed. The assignee will have to meet lending criteria which include the ability to repay the loan and the equity in property or other assets.

The bank can advise on applicable fees and charges that may apply to Defence Service Homes loans or Westpac loans.

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