Home loans for teachers - how do they work?
When it comes to home loans for teachers, there may be banks and lenders on the market willing to offer concessions, so if you’re an educator looking for a property, these are some things to know.

When it comes to home loans for teachers, there may be banks and lenders on the market willing to offer concessions, so if you’re an educator looking for a property, these are some things to know.
Key points:
- Some lenders in Australia may offer deals to teachers and educators.
- As a teacher, you may find a lender offering an LMI waiver.
- This means you could purchase a property with a 15% deposit.
If you’re a teacher planning to buy your first property, you may well be wondering if there are any specialist banks and lenders out there who might be willing to offer you a good deal. Home loan lenders who deal with specific types of professionals exist on the market in Australia, and may allow you to save money on costly things such as lender’s mortgage insurance (LMI).
How do home loans for teachers work?
For the most part, teacher mortgages work in the same way as any other mortgage. As a buyer, you will pay a deposit for a property and take out a loan which you’ll then pay off over an agreed period of time, at an interest rate that is either fixed or variable. The key difference is that there are some lenders on the market who may be willing to offer deals specifically for teachers, potentially even allowing you to purchase a property with a 15% deposit and avoid paying LMI.
What are the eligibility criteria for teacher mortgages?
Generally, the eligibility requirements of teacher loans are similar to the eligibility requirements for standard borrowers. When applying for a home loan, lenders will typically consider factors such as your income, employment history, savings, deposit, spending habits, credit score, and any assets and liabilities when determining your ability to service (or pay back) the loan.
There are some lenders that deal specifically with educators, though, in categories that can potentially include:
- Specialist teachers
- Primary school teachers
- High school teachers
- TAFE lecturers
- University lecturers and professors
- Tutors
- Professional trainers in the education field
- Students studying teaching
- Kindergarten teachers
- Government and private school teachers
Teachers in these roles may be eligible for LMI discounts, as long as the lender’s other criteria are met.
What is LMI and can teachers avoid it?
LMI is an amount of money that lenders typically charge to home loan borrowers who have a deposit of lower than 20%. This amount is in recognition of the added risk that the lender is taking on. Some banks and lenders will offer to waive LMI for people in certain professions, like doctors, nurses or lawyers. There are some home loan lenders on the market that provide LMI waivers for education professionals, which can allow teachers to purchase a property with a deposit lower than 20% and avoid LMI.
If you are an educator and you are interested in the potential of an LMI waiver, a qualified mortgage broker may be able to connect you with a lender who offers these particular deals to teachers.
What income sources do lenders consider for teachers?
Generally speaking, if you are applying for a home loan while working full time, your lender will consider your base salary when deciding upon your ability to service and repay the mortgage. It is important to note, however, that teachers can be remunerated in other ways.
According to Australian mortgage and finance company Mortgage Providers, other forms of income that home loan lenders may asses when considering teachers for a mortgage include:
- Higher duties allowance (HDA): This is an allowance found in many awards, that is paid to employees who are performing duties higher than their current role, while still performing their role day to day. According to Mortgage Providers, lenders will consider this as part of your income as a teacher as long as you have supporting evidence (such as a letter) to show that it is an ongoing part of your employment, and you can provide payslips showing it.
- Overtime: As with HDA, lenders may also consider overtime as part of your income as a teacher as long as it is ongoing and you can provide evidence of this. According to Home Loan Experts, however, lenders that do accept overtime as a form of income will only do so if you can show that this income is “regular and substantial”, and even then, they are likely to only count 80% of it towards your overall borrowing power.
Compare Home Loans (First home buyer with a variable rate) with Canstar
If you’re currently considering a home loan, the comparison table below displays some of the variable rate home loans on our database with links to lenders’ websites that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by comparison rate (lowest-highest). Products shown are principal and interest home loans available for a loan amount of $500,000 in NSW with an LVR of 80% of the property value and that offer an offset account. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s home loans comparison selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
$3,000 when you refinance with a ME home loan. Minimum loan amounts and LVR restrictions apply. Offer available until further notice. See provider website for full details. Exclusions, terms and conditions apply.
Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular product. If you decide to apply for a home loan, you will deal directly with a financial institution, not with Canstar. Rates and product information should be confirmed with the relevant financial institution. Home Loans in the table include only products that are available for somebody borrowing 80% of the total loan amount. For product information, read our detailed disclosure, important notes and additional information. *Read the comparison rate warning. The results do not include all providers and may not compare all the features available to you.
Home Loan products displayed above that are not “Sponsored or Promoted” are sorted as referenced in the introductory text followed by Star Rating, then lowest Comparison Rate, then alphabetically by company. Canstar may receive a fee for referral of leads from these products.
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Cover image source: DGLimages/Shutterstock.com
This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.

Alasdair Duncan is Canstar's Content Editor, specialising in home loans, property and lifestyle topics. He has written more than 500 articles for Canstar and his work is widely referenced by other publishers and media outlets, including Yahoo Finance, The New Daily, The Motley Fool and Sky News. He has featured as a guest author for property website homely.com.au.
In his more than 15 years working in the media, Alasdair has written for a broad range of publications. Before joining Canstar, he was a News Editor at Pedestrian.TV, part of Australia’s leading youth media group. His work has also appeared on ABC News, Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the University of Queensland.
When he is not writing about finance for Canstar, Alasdair can probably be found at the beach with his two dogs or listening to podcasts about pop music. You can follow Alasdair on LinkedIn.
The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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