Why teachers can get a better home loan deal

Did you know teachers can get better mortgage rates? Banks and home lenders are keen to offer teachers home and investment loans. Read more at uno.
Meredith Williams

Could it be true? Do teachers get better mortgage rates? Teaching is a rewarding profession in many ways, but one of the lesser-known benefits is that teachers are highly sought after by lenders.

Their stable employment and resulting incomes mean that banks and home lenders are keen to offer teachers home and investment loans.

In fact, the COVID-19 crisis has cast doubt over the job security of many other workers, so now might be an ideal time for teachers to consider taking out a mortgage for a home or investment property or to refinance their existing loan for a better deal with a new lender.

If this is you, then you’ll want to keep reading.

Are you thinking about buying a property and want to find out how much you could borrow, or do you need some advice about options, compare home loans or apply for one? Well, then you can start the process online in your own time.

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Or, perhaps you’re looking to refinance to take advantage of the low interest rates and competitive lending market? Why not start with checking our loanScore calculator to see how much you could be saving? It takes two minutes, and you could check to see if you could be saving thousands!

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In fact, a key home mortgage benefit for teachers is that some banks will lend them up to 85% of the value of their property without requiring them to take out Lenders Mortgage Insurance (LMI). It’s a big saving – LMI on an 85% loan for an $800,000 property comes to about $9,500.

For teachers who want to borrow more, some lenders will extend up to 95% of the value of a property if they take out a fixed-rate home loan.

Casual teachers welcome

It can sometimes be difficult for casual teachers to get a mortgage because of their uneven work patterns – many work about 40 weeks a year. Those school holiday gaps make for periods without income, particularly over summer, and these can deter some lenders.

However, there are some lenders that will take account of what’s known as your gross year-to-date income to determine your average fortnightly salary. These lenders will typically want to see three months of payslips to show that you have been in constant employment and some will also want a letter from your current employer stating that your teaching has been confirmed for the upcoming term.

Finding the right lender for an educator mortgage

It’s important that when seeking out a home or investment loan, teachers find a lender who understands the employment conditions of the teaching profession and how these can help teachers get a better loan deal.

This extra income could significantly increase your borrowing capacity, but many lenders wouldn’t count it because it doesn’t form a core part of your income. However, some lenders will recognise 100% of this income if you have a letter from the principal stating that this new position is ongoing.

It’s a similar story with income from overtime. Some lenders will count this if you have a letter from your school outlining how much overtime you’ve earned in the past year.

Not all lenders offer special deals for teachers or take account of their unique circumstances, so it’s a good idea to get expert advice from your uno mortgage broker, who can help you find the right mortgage deal from a lender who really understands teachers.

Why not request a call back from one of our expert brokers at uno? We’d love to help!

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Image credit: understood.org
Meredith Williams
* Three year fixed rate, owner occupier, P&I loan with a maximum LVR of 95% and a loan amount >$150,000. Lender rates and products may change. We cannot suggest you remain in or switch to any loan until we complete our assessment. Fees and charges apply. ^ 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. The comparison rate is calculated on the basis of a loan of $150,000 over a term of 25 years. ± All loan applications are subject to uno assessment and lender approval. uno does not guarantee that it will be able to find a customer a better loan than the one they currently have or to save them money.