Finder makes money from featured partners, but editorial opinions are our own.

LMI waiver for professionals

Certain highly-qualified professionals like doctors and lawyers can get low-deposit home loans with an LMI waiver, saving thousands in costs.

What you need to know:

  • Borrowers taking out low-deposit home loans get hit with hefty lenders mortgage insurance (LMI) premiums.
  • Lenders may waive LMI for highly-qualified professionals, such as doctors, lawyers, accountants and engineers
  • Check with a lender before applying to see if you qualify for an LMI waiver.

If you have very specialised qualifications in a high-demand field, plus a relatively high income, lenders view you as a low-risk applicant. This can mean better lending terms, even if you don't have a standard 20% deposit.

That can save you thousands in LMI costs and help you enter the market faster.

How do LMI waivers for home loans work?

Let's use a simple example to explain how this works. Say you decide to buy a home. You're a lawyer with a high income and you're now a partner at your firm. But you've not been earning a 6-figure income for long, having previously worked in non-profit law.

You have saved up to $100,000, which is a 10% deposit on the $1 million home you're looking to buy.

Your lender approves the loan but charges you over $20,000 in LMI premiums as a low-deposit borrower. You point out that you're a lawyer with a very high income, but the lender won't budge.

Then you approach another lender and mention your profession. The new lender says they'll happily waive LMI based on your profession and income. And just like that, you've saved yourself more than $20,000.

That makes the sting of your HECS debt feel a little better.

Which professions are eligible for LMI waivers on home loans?

The following professions are generally eligible for an LMI waiver:

  • Lawyers and conveyancers
  • Doctors and surgeons
  • Other medical staff (can be dependent on lender)
  • Veterinarians
  • Accountants
  • Dentists
  • Engineers
  • Financial planners

To be eligible, you generally need to be earning above a minimum salary threshold. For many lenders that is at least $90,000 a year but it can go up to $150,000 depending on your profession. You also need to be a member of your industry's peak body or authority, such as the Australian Medical Association.

How much can professionals save in waived LMI premiums?

The following table shows an estimation of the hefty LMI costs associated with obtaining a home loan. Avoiding these costs can save you thousands of dollars on your home loan.

All the results below are estimates for a 30-year loan term.

Deposit sizeProperty valueLMI premium
$25,000$500,000$15,888
$50,000$500,000$8,428
$37,500$750,000$32,867
$75,000$750,000$15,977
$50,000$1,000,000$43,728
$100,000$1,000,000$22,644

The above figures are estimates only, taken from Finder's LMI premium estimate calculator.

What lenders allow this and how can you get the discount?

A number of lenders offer these loans, including Auswide, Bank of Melbourne, St.George and Westpac.

However, many lenders will not offer these discounts up front. In fact, it may be harder for you to obtain this special discount by asking for it directly. It may be best to go through a mortgage broker – they know a few more ways to speed things up so you can take advantage of this special discount faster and with less hassle.

Compare mortgage brokers here

Other ways to avoid LMI for every borrower

But what about those of us who aren’t doctors, lawyers or engineers earning between $90,000 and $150,000 a year? There are other ways to avoid LMI.

No matter what your occupation is, you can still save on your home loan and LMI by doing the following:

  • Getting a guarantor. Getting a guarantor lets you qualify for a loan with a deposit below 20% and avoid LMI. By using their property as security, the guarantor minimises the risk to the lender.
  • Borrowing smaller amounts. Borrowing less means your LVR will be smaller, and therefore your LMI bill will be smaller or non-existent.
  • Save a bigger deposit. This is easier said than done, of course, but here are some deposit saving tips to help.
  • Borrowing off family. While most lenders require at least 5-10% in genuine savings regarding your deposit, if your family can give you more in the guise of a gift, you might be able to avoid LMI because your deposit is larger.
  • Apply for the First Home Loan Deposit Scheme. If you're eligible, the First Home Loan Deposit Scheme lets you buy a home with a 5% deposit and avoid LMI thanks to government support.

Why you can trust Finder's home loan experts

free
We're free
You won't pay any more by taking out a home loan with us. Better still, we regularly run exclusive deals that you won't find on any other site – plus, our tables make it easy to compare loans.
expert advice
We're experts
We've researched and rated dozens of home loans as part of our Finder Awards. We provide unique insights and our in-house experts regularly appear on Sunrise, 7News and SBS News.
independent
We're independent
Unlike other comparison sites, we're not owned by a third party. That means our opinions are our own and we work with lots of home loan lenders, making it easier for you to find a good deal.
help
We're here to help
Since 2014, we've helped 150,000+ people find a home loan by explaining the nitty gritty details simply and clearly. We'll never ask for your number or email. We're here to help you make a decision.

More guides on Finder

  • How to repay a home loan faster

    No one wants to spend years and years paying off what ends up being mostly interest. Here are several tips on how to pay off your home loan faster.

  • 4 disadvantages of refinancing your home loan

    Refinancing your home loan can get you a better interest rate, adjust your loan term and take advantage of new features, but there are some things to look out for to make sure it's the right decision for you.

  • Compare some of the best home loan cashback offers

    Home loan cashback deals can help you refinance to a cheaper interest rate and get a lump sum cash payment. Compare the latest deals and check your eligibility today.

  • Qantas Money Home Loans

    Get 100,000 Qantas Frequent Flyer points per year with a Qantas Money home loan, available for owner-occupiers and investors.

  • Funding bridging loans

    Funding offers competitive bridging loans for homeowners who want to buy their next property sooner.

  • Lendi Review

    Lendi is an online home loan platform that can help you compare and apply for mortgages online.

  • Average Australian mortgage statistics

    Our comprehensive guide to home loan statistics.

  • Compare investment home loan rates

    The best investor home loan rates that have been offered in years have hit the market. Compare investment property loan rates today.

  • Cheap home loans

    Find the cheapest home loan rates and learn how to decide which one best fits your needs and will save you the most money.

  • Best home loans with offset accounts

    What is an offset account? It can save you thousands in interest and help you own your home sooner.

Ask a Question

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our 1. Terms Of Service and 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Go to site