Soldiers will be offered interest-free loans of up to £25,000 to help them get a foot on the property ladder.
Defence Secretary Philip Hammond will today unveil the £200million scheme to increase home ownership in the military.
While three out of four officers in the armed forces own their own homes, just 36 per cent of other ranks do.
In the Army, the number of non-officers who own homes is just 27 per cent.
From next April for a three-year initial period, military personnel will be able to borrow the equivalent of half their salary interest free, up to a maximum of £25,000.
Repayments will be spread over ten years to ensure they are affordable.
Mr Hammond said: ‘Service personnel can struggle to enter the housing market as they move around throughout their career. By giving our troops this extra help they will be more able to set down roots and get on to the property ladder.’
Trouble buying a house is one of the main reasons given for leaving the armed forces. Personnel are often refused loans because of low pay, frequent moves and deployments across the globe.
Computer credit checks often automatically rule them out as too risky.
A report by former Tory donor Lord Ashcroft for the Ministry of Defence found more than a quarter of military personnel had been refused a mortgage, loan or credit card as a result of their career.
Barclays bank said on Thursday it will manually review any mortgage application from a serving member of the armed forces rather than leaving it to a computer.