Lenders mortgage insurance can cost tens of thousands of dollars. There are three ways to avoid it without a 20 per cent deposit.
Three ways: an LMI waiver for eligible professionals, commonly to 90 per cent of the price; the 5% Deposit Scheme for eligible first home buyers; or a family guarantee that brings the loan to 80 per cent or below.
Which one works depends on your occupation, the price and your family’s equity.
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What could a 5% deposit get you?
No LMI: an estimated $22,800 premium avoided (a broad guide; real premiums vary by lender and loan).
Stamp duty: $0 for eligible NSW first home buyers (saves $30,187).
Indicative only. The deposit excludes stamp duty, legal and inspection costs, and a participating lender, not this calculator, confirms 5% Deposit Scheme eligibility.
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A huge thank you to Charlie for his exceptional support and expertise throughout the process of securing finance for my first home.
Charles Touma from Links Property Finance was a great help with buying my first home. I had plenty of questions and he took the time to explain things clearly without making me feel rushed. He kept me updated throughout and made the process much less stressful. Really appreciated his patience and would happily recommend him to other first home buyers.
Charles went above and beyond to help us secure our home loan. He worked hard to find the best option for us and kept us updated throughout the whole process. His knowledge of the lending market was impressive and he made everything straightforward.
Charles Touma, Mortgage Broker.
A family guarantee can remove the need for insurance entirely, because a portion of a family member's property stands behind the loan in place of the deposit you do not have.
That is a different mechanism from an occupation waiver, it carries real obligations for the guarantor, and it can usually be released once enough equity has built. The guarantor guide sets out how that works and what the guarantor is exposed to.
A waiver is a saving, not a free upgrade. Borrowing more against a smaller deposit means a larger loan and a higher repayment, and the interest rate offered alongside a waiver is a separate negotiation.
Compare the total cost of the options rather than assuming the one without the premium wins.
Often one to two per cent of the loan amount at a 90 per cent loan to value ratio, and more at 95 per cent; the premium depends on the loan size and the ratio. Most borrowers add it to the loan.
Rarely. Some insurers refund part of the premium if the loan is repaid within the first one or two years. Refinancing to another lender does not transfer the policy, so a second premium can apply if the new loan is still above 80 per cent.
For an owner occupied home, no. For an investment property, the premium is a borrowing cost and is usually deductible over five years or the term of the loan if shorter. Check the treatment with your accountant before relying on it.
The main routes are the 5% Deposit Scheme for eligible first home buyers, a family guarantee that takes the loan to 80 per cent of the combined security, and professional waivers for eligible occupations. Each has its own conditions, so a broker checks which applies.
It means the lender is not charging lenders mortgage insurance on a loan where the deposit would ordinarily trigger it. The insurance protects the lender, not you, so removing it removes a cost you would otherwise carry for that protection.
Two broad routes. The first is occupation based: some lenders operate policies for particular professions. The second is structural, such as a family guarantee, where the security rather than the occupation removes the need for insurance.
No, and this is the part most people get wrong. Eligible occupations, the deposit required, the maximum loan size and the evidence needed all differ between lenders. A waiver available at one lender may not exist at another for the same applicant.
Not automatically. Avoiding the premium is a genuine saving, but the interest rate on offer is a separate question. A loan with a waiver and a higher rate can cost more over time than one without. The comparison worth making is total cost.
Then the occupation route is closed, but it is not the only route. A guarantor arrangement, a larger deposit, or choosing a lender whose insurance pricing is more favourable are all worth comparing. The low deposit guide covers the alternatives.
Charles will check which lenders have a policy that fits your occupation or your structure, and what it would require. Free, no credit check.
General information only. Whether mortgage insurance can be waived depends on current lender policy, your occupation and registration status, the property and your full circumstances. No waiver is promised or guaranteed here, and policies change.
Official sources for the figures on this page: Housing Australia, 5% Deposit Scheme. Scheme rules change; the official pages are the final word. Checked against these sources on 12 October 2026.
