Example: Dr Dave’s home loan
Dave is a surgeon who earns $150,000 per year. He’d like to buy himself an inner-city apartment priced at $1 million, but he’s only got $100,000 saved for a deposit. When he approaches his bank for a loan, he’s dismayed to discover that it requires him to fork out several thousand dollars for lenders mortgage insurance before they will approve him for a loan.
Looking elsewhere, he discovers a lender that offers home loans for doctors. This lender is happy to waive his lenders mortgage insurance payment even though he needs to borrow 90% LVR, plus they also offer a lower interest rate than his bank. As a result, Dave is set to save approximately $20,000 in LMI costs.
* This is a fictional, but realistic, example.