Defence Bank Home Loans: The 2026 Review

Defence Bank was established in 1975 to cater specifically to the financial needs of Australian Defence Force members and their families. Headquartered in Melbourne, Victoria, the bank was founded with the mission to provide tailored banking solutions for Defence personnel. Over the years, Defence Bank has expanded its services and product offerings, while maintaining its community-owned and independent status, distinct from the Big 4 banks.

Today, Defence Bank operates a network of physical branches complemented by comprehensive online services, ensuring accessibility for its members nationwide. The bank is known for its specialized products, such as the Defence Home Ownership Assistance Scheme (DHOAS) loans, which offer subsidised interest rates. Defence Bank differentiates itself with features like no application or monthly fees, 100% offset accounts, and competitive interest rates, appealing to its niche market.

Defence Bank's primary focus is on serving the Defence community, offering products like the 5% Deposit Scheme for first home buyers, which eliminates the need for Lenders Mortgage Insurance (LMI). Despite its conservative lending policies for unusual properties, the bank provides a strong value proposition through its community-oriented approach and tailored financial solutions, making it a preferred choice for Defence personnel seeking home financing.

• Legal Name: Defence Bank Limited
• ABN: 57087651385
• Established: 1975
• Headquarters: Melbourne, Victoria
• Type: Community-Owned Financial Institution
• Ownership: Independent

• Website: https://www.defencebank.com.au
• Phone: 1800 033 139

Defence Bank offers a range of flexible and cost-effective home loan solutions tailored to Defence personnel, featuring no application or monthly fees and a 100% mortgage offset account to reduce interest costs.

• 100% Mortgage Offset Account: This feature allows borrowers to link their savings account to their home loan, reducing the interest payable by offsetting the loan balance. It provides significant interest savings over the loan term, enhancing financial flexibility.
• Free Loan Redraw: Borrowers can access additional repayments made on their loan through a free redraw facility, with a minimum redraw amount of $100. This offers flexibility in managing finances, ensuring funds are available when needed without incurring fees.
• No Fees for Extra Repayments: Defence Bank allows borrowers to make extra repayments on their home loans without incurring any fees. This feature helps reduce the loan balance faster, saving on interest and shortening the loan term.
• Redraw Facility Available Online: The online redraw facility enables borrowers to conveniently access extra repayments via digital banking platforms. This enhances convenience and accessibility, allowing for efficient financial management.
• No Monthly Fees: Defence Bank home loans come with no monthly account-keeping fees, reducing the overall cost of the loan. This feature provides cost savings and simplifies financial planning for borrowers.
• DHOAS Home Loan Compatibility: The Defence Home Ownership Assistance Scheme (DHOAS) offers subsidised interest rates for eligible Defence personnel, making home ownership more affordable. This feature is exclusive to Defence Bank, providing a significant financial advantage.
• 5% Deposit Scheme: Eligible first home buyers can purchase a home with just a 5% deposit without the need for Lenders Mortgage Insurance (LMI). This scheme lowers the entry barrier for home ownership, making it more accessible.
• Loan Portability: This feature allows borrowers to transfer their existing loan to a new property without refinancing. It provides flexibility and convenience, especially for those frequently relocating.
• Interest-Only Options: Interest-only repayment options are available for up to 12 months during construction. This feature reduces initial outgoings, providing financial relief during the building phase.
• Australia-Based Contact Centre: Defence Bank offers customer support through an Australia-based contact centre, ensuring personalised service and local expertise. This enhances the customer experience, providing reliable and accessible support.

Defence Bank offers a transparent fee structure with several fee waivers and competitive rates, particularly for Defence personnel. Their home loan products often feature no application, monthly, or annual fees, enhancing affordability for borrowers.

• Application Fee: $0 - No application fee for most home loan products, making it cost-effective for borrowers.
• Valuation Fee: Varies by product - Covers the cost of property valuation, which varies depending on the loan product and property type.
• Settlement Fee: $300 - Charged at the time of loan settlement to cover administrative costs.
• Legal Fee: Varies by product - Covers legal costs associated with setting up the loan, varying based on the complexity of the transaction.
• Annual Package Fee: $0 (Annual) - No annual package fee for the Premier Home Loan, reducing ongoing costs for borrowers.
• Discharge Fee: $200-$300 - Applies when the loan is fully paid out or refinanced, with the amount varying by product.
• Variation Fee: $300 - Charged for making changes to the loan terms, such as switching products or altering repayment structures.
• Rate Lock Fee: Variable - Allows borrowers to lock in an interest rate before settlement, with the fee depending on the loan amount and duration of the lock period.

Defence Bank primarily lends to Australian Defence Force members and their families, offering specialised home loan products tailored to their unique needs.

• Applicants must be at least 18 years old.
• Must be an Australian resident.
• Eligibility for the Defence Home Ownership Assistance Scheme is required.
• A maximum of two borrowers per loan application is allowed.
• Applicants must demonstrate financial capacity to repay the loan.
• A minimum loan amount of $100,000 is required.
• Lenders Mortgage Insurance is applicable for deposits under 20%.
• Natural persons only; businesses cannot apply.

• LVR above 80% requires Lenders Mortgage Insurance (LMI).
• A 5% Deposit Scheme is available for first home buyers, allowing purchases with a minimal deposit without LMI.
• The Defence Home Ownership Assistance Scheme offers subsidised interest rates for eligible members.