Most borrowers must pay lenders mortgage insurance (LMI) if they are borrowing more than 80% of the property value.
LMI covers the bank for losses they incur if a default occurs on the home loan. There are some circumstances where this is waived, such as in government schemes for first-home buyers or single-parent families or for people working in certain occupations.
Can LMI be waived?
First Home Buyers
First-home buyers may find they can get an exemption from paying LMI if they apply for the Australian Government’s First Home Guarantee (FHGS), previously known as the First Home Loan Deposit Scheme.
Recent changes to how the First Home Guarantee’s eligibility criteria work have meant that borrowers who haven’t owned a home in ten years can also get their high LVR loan guaranteed too.
For information on government schemes and how they might apply to your situation reach out.
Family Guarantor
Borrowers who have a homeowner family member (usually a parent) can have them be the guarantor of their new home loan.
In a similar way to how first home buyers can pay no LMI fees if the government acts as their loans guarantor, the family guarantor also can help the borrower pay no LMI premium.
For more information about guarantors, click here.
Professional waiver
Lenders view some professions earning a certain level of income as low-risk borrowers and these professions can have access to specific policies with benefits that are not otherwise available to the public, such as being exempt from paying LMI.
Professionals that can get an LMI waiver generally include:
Medical professionals
- Medical professionals that are members of a professional organisation such as the AMA (Australian Medical Association). This includes doctors, dentists, optometrists, pharmacists, nurses, midwives, chiropractors, veterinarians and podiatrists, occupational therapists and physiotherapists.
Legal professionals
Legal professionals who are members of professional organisations qualify for an LMI waiver. This includes judges, lawyers, barristers, conveyancers and solicitors.
Accountants and finance professionals
- It is required that finance professionals can demonstrate membership to professional bodies or industry organisations, such as actuaries, auditors and Chief Financial Officers.
Entertainment professionals
- Professionals in the entertainment industry who are currently represented by an accredited manager, agent or accountant, including those working in fashion, theatre, film, television, and music.
Professional athletes
- To qualify for an LMI waiver as a professional athlete, an accredited agent or manager must represent you.
Mining Specialists
- This category includes people working in the resource, mining and energy sectors, including geologists, surveyors, and geophysicists.
Remember that to be eligible for a Lenders Mortgage Insurance waiver, you must meet the minimum income requirement and also be a suitable loan applicant with a solid financial history and a good credit score.
The list above is general and there may be other professions not listed, so if you’re unsure if you qualify for an LMI waiver, reach out to discuss your individual situation.
