LMI waiver for professionals

When purchasing a property, if your deposit is below a certain threshold amount, home loan providers may charge lenders mortgage insurance (LMI). The cost of LMI can run into the tens of thousands of dollars, depending on the size of the loan. Along with stamp duty, it can be one of the biggest expenses that come with a property purchase.

How does LMI work?

LMI is a form of insurance that exists in order to protect banks and other home loan lenders in the event that borrowers are no longer able to make the required repayments (default) on their loans. Generally speaking, lenders will require a home loan borrower to pay LMI if their deposit for a property purchase is less than 20%.

There is no set cost for LMI, and it will vary depending on a number of factors. These will include: the deposit you have saved up, the size of the loan, whether the property is an investment or for you to live in, your employment status, and the bank or lender’s own insurance provider requirements.

Generally, the lower your deposit, the more of a risk a lender might perceive you to be. This is why they will typically try and protect themselves by charging LMI to borrowers who are putting down less than 20%. LMI is not always charged, though, and there are some situations in which it might be waived.

What is waived LMI?

Some banks and lenders may offer an LMI waiver for professionals; borrowers who earn a high income or work in specific professions that the lender considers to be more stable.

Which professions qualify for waived LMI?

These professions can be categorised as

• Medical professionals, including doctors, surgeons, dentists, anaesthetists, nurses and other kinds of medical practitioners

• Legal professionals, including solicitors and barristers

• Accounting professionals

• Media and entertainment industry figures, including athletes

While people in these professions may potentially qualify for LMI waivers, it’s important to keep in mind that not all banks and lenders will offer them. It’s likely that you will also need to meet certain requirements, such as a minimum income threshold, before being approved.

According to the mortgage broker platform, Home Loan Experts, maximum loan size or deposit size limits may also apply, depending on the circumstances. It’s also likely that a lender will require you to be a member of your relevant professional body (for example, AHPRA for doctors and nurses) in order to qualify.

How much can you save with LMI waivers?

The amount you could save with an LMI waiver will depend on the size of the loan you wish to take out, and the size of your deposit. To give you an idea, we used the Your Mortgage LMI Calculator to come up with some practical examples.
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These calculations were made using the Your Mortgage LMI Calculator, January 2025, based on a 30-year loan term and assuming that the borrower is not a first home buyer. These figures are meant to be illustrative only as the actual amount of LMI saving you could make with an LMI waiver will depend on your needs and circumstances.

Why do some professionals qualify for LMI waivers?

Generally speaking when it comes to home loans, banks and lenders are concerned with risk. The riskier they perceive the borrower to be, the stricter the terms and conditions—which can be found in the Product Disclosure Statement (PDS) and Target Market Determination (TMD)—they will tend to place on a loan. But the reverse can also be true.

Some banks and lenders offer LMI waivers to professionals because they want to attract these kinds of borrowers; who are generally less risky because of their high incomes and mostly stable employment prospects.

Some banks and lenders will also offer LMI waivers to professionals in hopes of building longer term relationships with them. For example, banks that offer home loan deals to doctors may do so in order to build potential business banking relationships with them. These kinds of customers may also be likely to deposit large sums of money in linked transaction accounts, and take out other products such as credit cards.

Which banks offer LMI waivers?

A variety of banks and lenders in Australia offer LMI waivers for professionals, including several of the ‘big four’ banks.

Given the number of home loan providers available on the market, you may want to speak to a mortgage broker. They may be able to advise on a home loan lender who can offer you LMI waivers along with terms that will suit your needs and circumstances. You can also compare home loans with Canstar, as well as do your own research into which lenders offer LMI waivers.

What are some other ways you can get LMI waived?

If you don’t work in one of the professions mentioned above, there are still some circumstances in which banks and lenders may be willing to waive LMI.

Under the First Home Guarantee Scheme (formerly known as the First Home Loan Deposit Scheme), the federal government will partially guarantee home loans for eligible buyers with a deposit as low as 5%, allowing them to save on LMI. There are currently 35,000 places available each year across the scheme, and borrowers must meet relevant eligibility criteria.

It may also be possible to avoid LMI by taking out a home loan with a guarantor, who can provide additional security for your loan if you have a deposit of less than 20% saved.

Can you qualify for a LMI waiver with a combined income?

It is possible to qualify for an LMI waiver with a combined income, but there are certain eligibility criteria you would need to meet. This criteria also varies across different states and territories, as well as professions. It’s important to discuss this with potential lenders and/or mortgage brokers to help clarify if you qualify.

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