Compare your home loan options as an education professional with Savvy today.
Fact checked
You may not think that being a teacher entitles you to any special treatment when it comes to applying for a loan, but this isn’t always the case. To take advantage of special offers available to teachers and education professionals, it’s crucial to compare as many options as possible to find the one which best suits your needs, which you can do right here with Savvy.
A teacher mortgage, or teacher home loan program, is no different to a standard home loan offered by any lender in terms of the way that they’re structured: you apply for a home loan with a set deposit and, if approved, repay your debt over a period of 25 to 30 years (typically) in regular instalments with interest. All of this is consistent with what you might expect with any other standard profession.
However, what teachers can receive from some lenders is a waiver or discount on Lenders Mortgage Insurance (LMI). LMI is a policy taken out by your lender designed to protect them in the event you end up defaulting on your loan and they lose money. It’s usually waived by lenders for borrowers with a deposit of at least 20% of the value of the property they’re purchasing. For teachers, though, an LMI waiver can be offered for deposits of 15%, giving you an extra 5% of leeway before the policy kicks in.
Even for deposits of substantially less than 15%, there are some lenders who will be willing to approve home loans for teachers with a discounted LMI policy. For instance, you may be able to offer a 5% deposit (or sometimes even 3% with specialist lenders) without paying the full price for LMI that another borrower would in the same position. All of this is to do with the job security that teachers have once they’re made permanent. Stable income and job security are high on the priority lists of lenders when processing applications.
When applying for a home loan as a teacher, you’ll need to meet a series of eligibility criteria, both standard and relating to teachers specifically. These include:
Your job
Lenders will look for borrowers who’ve been working in their job for an extended period prior to their application, but this isn’t always a necessity. You can usually apply after three months in your permanent position (either full-time or part-time) and after the completion of your probationary period. This will be shown via recent payslips and/or bank statements. If you work part-time, however, you may find that your lender will want to know more about the hours you work each week.
Any number of education professionals can qualify for a home loan for teachers. To receive an LMI waiver or reduction, you’ll have to be one of the following:
Your income
An extension of the requirement for you to hold stable employment is also to be earning a consistent and comfortable income. As a teacher or education professional with permanency, this shouldn’t be too great an issue for you. However, what is relevant to consider is how comfortable you are with your income in relation to your other expenses. If a significant portion of the income goes towards household bills and living expenses for you and your family, for instance, there’ll be less to work with in terms of putting funds aside for your home loan repayments.
Your deposit
Of course, you’ll need to supply a sufficient deposit towards the purchase of your home. As mentioned, some lenders will be willing to waive LMI up to 85% LVR, meaning you’d only be required to submit a minimum of a 15% deposit to avoid it. However, this isn’t the case across the board, so you should always compare lenders to ensure you’re signing up to the right one for you. At least part of this, if not all, will have to be through genuine savings, which is another consideration for lenders assessing your application.
Your credit history
Whilst your credit history and score likely won’t form a major part of your application, since your loan is backed by a significant sellable asset, it’s still assessed by lenders. If you have a recent history of defaulting or bankruptcy, your lender may choose to decline your application or accept it requiring a larger deposit or charging higher interest and fees.
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A large part of the home loan process is ensuring you’re confident that you’re signing up for the right loan. Fortunately, comparing with Savvy can help you do just that. Considering more options throughout this process will put you in a better position to ultimately decide on which is the best for you and which lender is the most likely to approve your application on favourable conditions.
Lenders value job security and stability very highly, so the longer you’ve been in your job and earning the same (or similar) salary, the better. If you’re in the process of looking for a home loan and a new job crops up which you’re interested in, it’s important to understand that accepting it may compromise your ability to get approved for the loan you want.
Paying off a home loan is a marathon effort potentially taking place over decades, so it requires a great deal of discipline in terms of money management. Lenders will want to see any indication they can that you possess financial discipline and won’t be tempted to burn through your money and leave your loan in the lurch. Building your savings over time consistently will help you get approved.
Of course, you should only focus on one home loan application at any given time. Applying for multiple in quick succession, particularly if they’re rejections, may ward off potential suitors and ultimately make it harder for you to get approved. The applications you make will also count towards your credit score and decrease it if you make too many in close proximity.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
