Stop the banks ripping off our military to the tune of $250million

Stop the banks ripping off our military to the tune of $250million

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I have recently discovered that Australian banks are charging higher interest rates on home loans for military members as they are ‘subsidised by the government’ and the military ‘can’t have everything’ (phone call from NAB home loan specialist) pocketing over $250 million over the past 10 years. Sadly, military members are being ripped off by the banks, and the Minister responsible doesn’t seem to know or care! Minister for Veterans and Defence Personnel, The Hon Darren Chester, you must hold the banks accountable and ensure the same interest rates are made available for DHOAS and non-DHOAS loans. Banks are rorting $2 million a month, when will it stop?

Please share, comment, let your military friends know. With enough people we might make a real difference for the military and their families.

The detail:

The Defence Home Ownership Assistance Scheme (DHOAS) was established by the Australian Government in July 2008 to support Australian Defence Force (ADF) members in owning their own homes, with an initial 10-year budget of $864 million. DHOAS provides a monthly subsidy to ADF members through payments towards their home loans – up to $500 / month. However, the loans must be made through one of 3 banks (National Australia Bank (NAB), Australian Military Bank and Defence Bank) which limits competition and has seen a disparity in interest rates between DHOAS loans, non-DHOAS loans at these banks and loans offered by other providers. I discovered this when negotiating a home loan rate with the NAB retentions team last week, I had a DHOAS eligible loan and a non-DHOAS eligible loan – exactly the same in all other areas. The DHOAS loan was quoted at 4.16%, while the non-DHOAS loan was 3.9%. When I queried why the DHOAS loan was higher, I was told ‘because you get subsidised by the government’, when mentioning that was not a good reason I was further told ‘well, you can’t have everything’. This variation in interest rates means that almost a third of my subsidy is lost in higher interest every year! With other banks offering even lower rates, my subsidy is almost worthless, and it all goes straight to the bank.

The reality is, the banks are charging more for DHOAS loans, and skimming a portion of the subsidy for their own benefit and arrogantly declaring that because military members are getting subsidised by the government they can charge more. THIS IS NOT RIGHT! While it is hard to determine exactly how much money has been rorted from military members, here is a realistic calculation:

  • NAB is charging at least 0.26% more interest for DHOAS (my own experience).
  • There are on average 25000 loans each year, for the past 10 years (ANAO report).
  • If the average home loan is $384000 (ABS) this equates to more than $250 MILLION!

This means that these banks are profiting significantly off our military, and our government is letting it happen. I called DHOAS and they admit banks charge more, yet what can you do? A lot I hope! I have emailed the Minister for Veterans’ Affairs, who is responsible for DHOAS, and I have had no response - hopefully this petition will get his or the media's attention. After all the issues that banks have had, especially the NAB, I am surprised that no one seems to care. Maybe it’s because the government receives commissions in return from the loan providers? ANAO notes that over the same 10-year period the banks will pay commissions near $170 MILLION… the whole process is a rort, and it’s the military members who have to deal with it.

This petition is for Minister for Veterans and Defence Personnel, The Hon Darren Chester to hold the banks, and themselves accountable. To force the banks to provide the same interest rate for DHOAS loans as any other variable or fixed rate loan.

The Hon Darren Chester MP
Minister for Veterans’ Affairs
Minister for Defence Personnel
Minister Assisting the Prime Minister for the Centenary of ANZAC 

PO Box 6022
House of Representatives
Parliament House
Canberra ACT 2600

Telephone:(02) 6277 7820

Please sign this petition, share it widely and if you know anyone with a DHOAS loan let them know. If you have a DHOAS loan and story to share, then please comment - the more people we can get, the greater chance we can actually get a decent subsidy.

0 have signed. Let’s get to 500!
At 500 signatures, this petition is more likely to be featured in recommendations!