Answered by a Real Broker
After helping thousands of Australians navigate home loans, I’ve heard every LMI question imaginable. From “What is LMI?” to “Why am I paying insurance that doesn’t even protect me?” – I get it all.
So I’ve compiled every single question I’ve been asked about LMI waived loans, costs, and alternatives into this ultimate FAQ. Bookmark this page – you’ll thank me later.
The main players are:
Insider tip: Not all banks advertise these deals. Some are broker-exclusive, which is why you need someone like me in your corner. Learn more about LMI waived loans and how they work.
Absolutely! Westpac and their family (St.George, Bank of Melbourne, BankSA) are actually some of the most generous with LMI waivers. They cover:
ANZ calls certain professionals "low-risk" because statistically, they default less often. Their waiver covers:
The catch: They're picky about which medical specialities qualify. Some get excluded.
CBA is sneaky about this. They don't advertise it much, but yes – they have LMI waivers for:
Reality check: Most CBA LMI waivers are broker-only deals. Walking into a branch won't get you these offers.
Yes, but they're exclusive. Macquarie only offers LMI waivers to medical professionals, and they want the cream of the crop. Think established specialists, not fresh graduates.
Here's where ubank is different – they offer LMI waivers to ANY owner-occupier (not just professionals) but only up to 85% LVR. So you need a 15% deposit minimum.
The "golden professions" are:
Yes, but it's limited. Bank First and Granite Home Loans are your best bets. Most big banks don't include teachers in their standard professional packages. Check out our specialised home loans for teachers for more details.
Success story: I recently got a primary school teacher into her first home through Bank First with 10% down and zero LMI. Saved her $11,000.
Selected lenders like Granite Home Loans include engineers. The big banks are hit-and-miss – it often depends on your specific engineering field and income level. Learn more about home loans for engineers.
Absolutely! Nurses are well-respected by lenders. Westpac Group, BankVic, People's Choice, and several others offer nurse-specific LMI waivers. Check out our specialised home loans for nurses.
Not if you know where to look! BankVic (originally the Victoria Police Credit Union) obviously loves police. Westpac Group and several others also waive LMI for police officers. Learn more about home loans for police officers.
LMI costs vary wildly based on your deposit size and loan amount. Here's the brutal truth:
Reality check: These are rough figures. Each lender's LMI provider charges differently.
With a 10% deposit ($50k), you're looking at roughly $6,000-9,000 in LMI. With 5% deposit, it jumps to $13,000-18,000.
My advice: This is exactly why professional LMI waivers are so valuable. We're talking serious money here. Explore LMI waived loans to see if you qualify.
Yes, thankfully! You pay LMI once, not monthly. You can either:
Not really. LMI is set by the insurance companies (Genworth, QBE, etc.), not the banks. But here's the thing – you CAN negotiate which lender you use, and some have cheaper LMI providers than others.
Your main options:
Traditionally, 20%. But with professional waivers, it could be as little as 5%. With government schemes, sometimes just 2%.
Usually, yes! If parents guarantee part of your loan (typically 20% of the property value), you can avoid LMI entirely. It's like having a 20% deposit without actually having the cash.
Family guarantee reality: This ties up your parents' property as security. Make sure everyone understands the risks.
Not necessarily! The government's First Home Guarantee lets eligible first-home buyers:
The catch: Limited spots available each year, and there are property price caps.
It's the government saying "We'll guarantee part of your loan so you don't need LMI." Available nationwide with:
As of my last update, it's ongoing but with annual quotas. The government typically announces extensions in their budget. I always recommend applying ASAP if you're eligible – spots fill fast.
Honestly? Very few if you qualify. The main ones:
Roughly $500,000-600,000, depending on your other debts, expenses, and the lender. Every bank calculates differently.
Pro tip: Your borrowing capacity isn't just about salary. Credit cards, car loans, even buy-now-pay-later services affect it.
Typically around $80,000-100,000 annually, assuming minimal other debts. But this varies hugely between lenders.
Probably not on its own, but combined with:
I've helped clients buy with very small deposits. It requires creative structuring.
For owner-occupiers: No, unfortunately not. For investment properties: Yes, you can claim it as a borrowing cost over 5 years.
Only in very specific circumstances:
Reality: Don't count on getting LMI back. It's generally gone once paid.
Harsh but fair question! LMI protects the lender, not you. If you default, you're still liable for any shortfall. So yeah, from a borrower's perspective, it feels like paying for insurance that doesn't benefit you.
But: It does let you buy with less deposit, so there's that trade-off.
This is the sweet spot for professionals! You borrow 90% of the property value (need 10% deposit) but don't pay LMI because of your profession. Best of both worlds. Perfect for doctors, lawyers, accountants, and other eligible professionals.
Honestly? Non-bank lenders are often more flexible than big banks. They look beyond just computer-says-no credit scoring. But "easiest" doesn't always mean "best deal." For self-employed borrowers, non-bank lenders can be particularly helpful.
Most major banks offer family guarantee options:
The process: Parents use their property equity to guarantee part of your loan.
Generally no. Most lenders only accept immediate family members (parents, siblings, sometimes grandparents) as guarantors.
Yes, through the First Home Super Saver Scheme! You can:
Catch: It's only for first-home buyers and has contribution limits.
Absolutely! In fact, single parents have access to the Family Home Guarantee, which allows:
Reality check: Income is still assessed, but being a single parent doesn't disqualify you from getting a mortgage.
The holy grail! Here's how some of my clients have done it:
Location matters: Each state has different stamp duty concessions for first-home buyers.
After 30 years in this game, here's what I tell every client: LMI isn't evil, but paying it when you don't have to is just bad financial planning.
If you're a medical professional, teacher, nurse, police officer, or any other eligible occupation, there's probably a way to avoid LMI through LMI waived loans. If you're a first-home buyer, government schemes might save you thousands.
But here's the thing – these deals change constantly. What's available today might not be tomorrow. Banks have quotas, policies change, and some deals are so exclusive you'll never see them advertised.
That's where I come in. I track these changes daily, I know which lenders say yes when others say no, and I've built relationships that get my clients access to deals they'd never find on their own.
Ready to skip the LMI fees? Let's chat. I'll review your situation for free and show you exactly what options you have. No sales pitch, no pressure – just honest advice from someone who's seen it all.
Want personalised advice on avoiding LMI? Book a free consultation and let me show you the strategies that have saved my clients hundreds of thousands in unnecessary fees.
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