If buyers are looking to get a home loan with less than 20% deposit, they must consider if Lenders Mortgage Insurance (LMI) will be required. LMI can be paid either as a lump sum paid upfront at settlement, or by adding LMI to the home loan (called capitalisation or capitalised to loan). This of course increases the loan amount and total interest payable.

However, some lenders offer an LMI waiver for borrowers who work in certain professions with criteria around working history and professional memberships. Subject to eligibility and lending terms and conditions, some borrowers can save thousands or tens of thousands of dollars depending on the loan amount. 

Some lenders may offer an LMI waiver—or a discounted premium—to certain professions due to the perceived stability of the borrower’s earning potential and thereby reducing the risk the lender takes in approving a home loan. There’s also an additional commercial motivation for lenders to secure a customer-relationship with certain high-income professions and professionals beyond just a home loan product. Lenders will also see the potential for those customers to additionally sign up for/purchase the lenders’ range of banking products and financial services.

Professions can include: 

  • Specific medical professionals (e.g. GPs, dentists, specialist surgeons, medical specialists, radiologists).
  • Pharmacists.
  • Veterinarians.
  • Industry professionals (e.g. legal professionals, accountant professionals).

The list above offers a general guideline as:

  • not all lenders offer LMI waivers
  • lenders that offer LMI waivers have individual criteria.

 Beyond looking at a particular lender’s criteria for a LMI waiver for professionals. All lenders that offer will specify the following:

  • Property purchase type.
  • Property purchase locations—sometimes at a granular level by postcodes in each state/territory.
  • Loan amount limits.
  • Loan products and facilities.
  • Income criteria.
  • Membership type and status.
  • Work history and status/employment basis.
  • Banking facilities/accounts and customer history.

Of course, the circumstances of any co-applicant on a home loan are also assessed and factored into whether a waiver or discount is available.

As your broker, Get Real Finance will assess which lenders and loan products are suitable for your circumstances and assist you on how to make an informed decision. Once you’re ready to proceed with an application, we’ll make the necessary enquiries with the chosen lender to submit the required eligibility checks and evidence required.