Ways police can get into their first home

  • Find out how much deposit you need
  • A family guarantee might be able to help you
  • If you earn overtime it could help increase your borrowing power

If you’re a Police Officer who has been steadily saving for a first home deposit, you’ve no doubt been making a lot of sacrifices to get there. Saving for one of life’s biggest purchases is tough going, and usually means long hours spent working overtime and not spending on holidays, dinners out, and new clothes.

Moving from “saving for a deposit” to “ready to buy” may seem far away but it could be closer than you think. Here are some tips for police looking to get into their first home sooner.

How much deposit do you need?

Many lenders require a 20% house deposit to avoid paying Lenders Mortgage Insurance (LMI), an expensive one-off payment that protects the lender in case the borrower can no longer pay their loan.

In 2021 the average first home buyer deposit in Victoria was $112,119*, an amount that will take a long time to save for. 

However, at BankVic, Police members are only required to have a 10% deposit to get a home loan, without the need for LMI –bringing you closer to buying your first home.

“Whether you’re buying your first home or upgrading to a bigger home, we only require a 10% deposit from our police members, saving them thousands in LMI.” Explains Paul Meilak, Mobile Lending Manager.

Could a Family Guarantee help you?

Another way to get into your home earlier is to use a Family Guarantee, which essentially allows a family member to use the equity they have built up in their home as a security guarantee for a portion of your loan. This reduces the amount of deposit you require to avoid LMI.

It’s important to remember that this is not something that a family member should go into lightly. They will need to understand all of their obligations.

“Family guarantees offer a way for people to help family members get a foot into the property market.” Paul says. “Once the member has built up 20% equity in their home, we can release the security of the guarantor”.

How your police overtime could increase your borrowing power

An important part of preparing to buy your first home is working out your borrowing power. Your borrowing power is what’s remaining after you minus all your expenses from your income. This is the capacity you have to service your loan.

If you’re a police officer who earns regular overtime, then you want your overtime to be counted as your income. Some lenders may only consider a portion of your overtime. At BankVic we consider up to 100% of Police overtime and penalty rates which means your borrowing capacity can be considered greater. Read more at Police put your overtime into overdrive with these 4 tips

“As a bank for police, we understand police pay streams including overtime and penalty pay. We ‘get police’ and that’s why we streamline the loan process right through until settlement.” Paul says.

If you’re wanting to find out how close you are to buying your first home, get in touch with a bank that understands the police.

Talk to one of our lenders by calling 13 63 73 or book a time with a mobile lending manager to find out how our first home buyer lending products are tailored to meet the unique needs of police.

BankVic is proud to serve Victorians working in police, emergency services, and health.

*Finder.com.au.. This article was published on 3 December 2021 and the information was current at that time. Normal lending criteria apply to all loan applications. The information in this article is general in nature and does not take into account your personal situation or needs. Please consider whether it is appropriate for you before acting on this information. 

As of 15 May 2023, only Victoria Police, Health and Emergency services employees can borrow up to 90% of the property value and pay no LMI for new purchases within Metro Melbourne including Geelong area.