If you’re a Queensland Police officer dreaming of buying your first home, you may think you need a 20% deposit before you can even start looking.
The good news is that isn’t always the case.
Many police officers are able to purchase their first home with a much smaller deposit, and in some cases, without paying Lenders Mortgage Insurance (LMI).
The key is understanding the options available and choosing the right lender.
Do you really need a 20% deposit?
No.
While having a 20% deposit can certainly have its advantages, it isn’t a requirement to buy your first home.
Many first home buyers purchase with much less.
Depending on your circumstances, you may be able to buy with as little as a 5% deposit through one of the Australian Government’s Home Guarantee Scheme.
There are also some lenders that recognise the lower-risk nature of certain professions, including police officers.
If you’re a serving Queensland Police officer, some lenders may allow you to purchase your first home with just a 10% deposit without paying Lenders Mortgage Insurance (LMI). This professional benefit can save you thousands of dollars and is available because some banks recognise the stable employment and lower risk associated with police officers.
Whether a 5% deposit through the Home Guarantee Scheme or a 10% deposit under a professional lending policy is the better option will depend on your individual circumstances, income and the type of property you’re purchasing.
What is the Home Guarantee Scheme?
The Home Guarantee Scheme is an Australian Government initiative that helps eligible first home buyers purchase a property with as little as a 5% deposit.
Normally, if you borrow more than 80% of a property’s value, you’ll need to pay Lenders Mortgage Insurance.
This can add many thousands of dollars to the cost of buying a home.
Under the Home Guarantee Scheme, the Government guarantees part of your loan, allowing participating lenders to waive the need for Lenders Mortgage Insurance if you meet the eligibility criteria.
For many first home buyers, this can be the difference between buying now or waiting several more years.
Not every lender offers the same options
One of the biggest misconceptions is that every bank offers the same home loan options.
They don’t.
Only selected lenders participate in the Home Guarantee Scheme.
Likewise, only certain lenders offer professional lending benefits that allow eligible police officers to purchase with a 10% deposit without paying Lenders Mortgage Insurance.
That’s why it’s important to choose a lender that not only offers the right scheme or professional policy but is also the right fit for your financial situation.
The right lender could increase your borrowing power
For police officers, choosing the right lender involves more than just finding a competitive interest rate.
Many lenders assess police income differently.
Depending on your payslip, your income may include:
- Overtime
- Operational Shift Allowance (OSA)
- Night shift allowances
- Meal allowances
- Locality allowances
- Plain clothes allowance
- Stocking allowance
- Dog Squad allowance
- Other specialist or operational allowances
Some lenders will assess 100% of these ongoing payments, while others may only include around 80%.
That difference could significantly reduce your borrowing capacity.
Some lenders also combine favourable income assessment with professional benefits for police officers, such as allowing a 10% deposit without paying Lenders Mortgage Insurance.
Choosing the right lender means you’re giving yourself the best opportunity to maximise how much you can borrow while also reducing the amount of deposit you may need.
Don’t forget the other upfront costs
Even with a smaller deposit, it’s important to budget for the additional costs involved with buying a home.
These may include:
- Conveyancing fees
- Building and pest inspections
- Government registration fees
- Moving expenses
- Home and contents insurance
The good news is that eligible first home buyers in Queensland may also qualify for stamp duty concessions, helping to reduce their upfront costs even further.
Why working with someone who understands policing makes a difference
Buying your first home is stressful enough without having to explain your payslip to someone who has never seen one before.
That’s where working with someone who understands policing can really help.
Before becoming a mortgage broker, Dan spent 15 years as a Queensland Police officer, including six years as a detective.
I understand:
- Rotating rosters
- Night shifts
- Meal allowances in overtime
- Recall to Duty
- Specialist allowances
- Operational shift allowance
- The unique challenges that come with police employment
Because I’ve been there myself, I know which lenders generally assess police income more favourably and which policies can make the biggest difference to your borrowing capacity.
You may be closer than you think
Many Queensland Police officers are surprised to learn they don’t need a 20% deposit to buy their first home.
Whether it’s purchasing with a 5% deposit through the Home Guarantee Scheme or taking advantage of a lender that offers police officers a 10% deposit without Lenders Mortgage Insurance, there may be more options available than you realise.
With the right lender, access to Government support and advice from someone who understands police employment, buying your first home could happen much sooner than you expected.
If you’re a Queensland Police officer wondering how much deposit you’ll need or which lender is likely to give you the best outcome, I’d be happy to help you understand your options and point you towards the lenders most likely to help you achieve your goal of home ownership.
