No LMI and waived LMI home loans
Lenders mortgage insurance is a real cost, and there are situations where it can be avoided without a twenty per cent deposit. There are two routes: your occupation, or the structure of the security behind the loan. This page covers both, and which lenders take which view is the part worth checking before you apply.
What the insurance is, and who it protects
Lenders mortgage insurance covers the lender against loss if a loan goes bad and the property sells for less than is owed. You pay for it, and it protects them. It is generally triggered when the deposit falls below a threshold set by the lender, and the premium is usually added to the loan rather than paid up front, so it quietly increases what you owe and what you repay.
Route one: your occupation
Some lenders operate policies that waive the insurance for particular professions, on the reasoning that those occupations carry a lower default risk. Which occupations qualify, the maximum loan to value ratio and the evidence required all vary between lenders.
Route two: the structure of the security
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 actually exposed to.
Working out whether it is worth it
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.
Occupations that commonly appear
Grouped roughly as lenders group them. Whether a specific role inside a group qualifies depends on the lender, and it is worth checking rather than assuming.
Doctors, dentists, specialists and veterinarians appear on the most lists and often attract the most generous terms, in some cases above 90 per cent.
Optometrists, physiotherapists, chiropractors and pharmacists appear on some lists but not all, and the treatment varies more than in the medical group.
Practising solicitors and barristers, usually requiring current admission and often a minimum income.
Chartered accountants, CPAs, actuaries and some finance roles. Professional body membership is normally the test rather than the job title.
Appears on fewer lists than the categories above, and where it does there are often chartered-status or income conditions attached.
Some lenders extend waiver-style treatment to nurses, teachers, police, paramedics and firefighters. It is less widespread and the terms are usually different from the professional lists.
What lenders check beyond the job title
Being in the right profession is the first test, not the only one. Most lenders also look for evidence of current registration or membership of the relevant professional body, and many attach a minimum income to the category.
Beyond that, the ordinary rules still apply. Your borrowing capacity is assessed the same way, your existing commitments still count, and the property still has to be acceptable security. A waiver removes a cost; it does not remove an assessment.
Some lenders also restrict waivers to owner-occupied purchases, or apply different maximum ratios to investment lending. If you are buying an investment property, raise it early, because it changes which lenders are worth approaching.
Where it is worth most
The saving scales with the loan, so the higher the amount and the higher the loan-to-value ratio, the more a waiver is worth. At Sydney prices it is often the single largest cost a borrower can remove from a purchase.
It also changes what is possible rather than only what it costs. Someone with a 10 per cent deposit who would otherwise face a substantial premium can buy at that deposit without it, which can mean buying sooner rather than saving for another year.
Worth weighing against the alternatives, though. A waiver, a family guarantee and a government scheme can each remove the premium, and which suits you depends on your deposit, your family and your eligibility. Compare the low deposit routes.
Things worth knowing before you rely on one
Policies change
Waiver lists are commercial policy, not regulation, and lenders add and remove categories as their own risk appetite shifts. A list that was accurate a year ago may not be accurate now, which is why we check at the time you apply rather than working from anything published.
A waiver is not automatically the best loan
A lender offering a waiver may not offer the sharpest rate or the most suitable structure, and over a long loan term the difference can outweigh a one-off premium. The comparison worth doing is total cost over the years you expect to hold the loan, not the premium alone.
Both applicants matter
On a joint application, most lenders need only one applicant to meet the professional criteria, but not all, and some require that applicant to hold a minimum share of the income. If only one of you is in a listed profession, it is a question to ask up front.
It does not affect scheme eligibility
Qualifying for a waiver does not exclude you from the first home buyer schemes, and the schemes remove the premium too. Where both are available, the choice usually comes down to price caps and deposit size rather than to the premium itself.
Lending by profession
How lenders read the income, and where a profession based concession may apply.
Doctors
How lenders read doctor income, and where a profession based concession may apply.
OpenDentists
How lenders read dentist income, and where a profession based concession may apply.
OpenVeterinarians
How lenders read veterinarian income, and where a profession based concession may apply.
OpenPharmacists
How lenders read pharmacist income, and where a profession based concession may apply.
OpenOptometrists
How lenders read optometrist income, and where a profession based concession may apply.
OpenPhysiotherapists
How lenders read physiotherapist income, and where a profession based concession may apply.
OpenPsychologists
How lenders read psychologist income, and where a profession based concession may apply.
OpenLawyers
How lenders read lawyer income, and where a profession based concession may apply.
OpenAccountants
How lenders read accountant income, and where a profession based concession may apply.
OpenQuestions about waived LMI
What does a waived LMI home loan actually mean?
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. It does not change the size of the loan or the repayment.
Who can get LMI waived?
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.
Is a waiver the same at every lender?
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.
Does a waiver mean a cheaper loan overall?
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.
What if my profession is not on any list?
Then the occupation route is closed, but it is not the only route. A guarantor arrangement, a larger deposit, or simply choosing a lender whose insurance pricing is more favourable are all worth comparing. The low deposit guide covers the alternatives.
Related guides
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.
Find out if a waiver is available to you.
Charles will check which lenders have a policy that fits your occupation or your structure, and what it would actually require. Free, no credit check.
