Save thousands of dollars in mortgage insurance with an lMI waiver

discover how to save money & purchase sooner with an LMI Waiver

Did you know that borrowers who work in certain occupations may be eligible for a waiver of Lenders Mortgage Insurance (LMI). This can potentially save tens of thousands of dollars.

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With a median house price of more than $1 million in some areas of Australia saving a 20% deposit can be very difficult. When purchasing a property with less than a 20% deposit you normally need to pay a Lenders Mortgage Insurance (LMI) premium which can be tens of thousands of dollars.

HOW TO GET LMI WAIVED

Couple enquiring about a no LMI loan

As per our comprehensive blog article on LMI waivers, there are several ways you may be able to get LMI waived on your home loan.

Occupation-based lMI Waiver

If you work in one of the following occupations you may be eligible to borrow up to 90-95% of the property value without LMI:

    guarantor or family guarantee home loan

    If you have a family member who owns a home and is happy to act as your guarantor you may qualify for a Guarantor Home Loan. Using a guarantor means that LMI isn’t required and you will qualify for interest rates normally only available to borrowers who borrow 80% of the property value.

    85-90% LVR No LMI loan

    Some lenders can lend up to 85% or 90% of a property value without LMI and without the need to meet any occupation requirements. The interest rates on these loans are generally higher than standard home loans.

    deposit boost home loan

    If you have less than a 20% deposit a deposit boost loan may allow you to avoid paying lenders mortgage insurance. They do this by lending you the further funds required to make up the 20% deposit in a second mortgage that is separate from the primary 80% home loan.

    Although LMI doesn’t apply on this loan a “Low Deposit Premium” is payable but this is generally less than LMI.

    Lady smiling after realing she received an LMI waiver

    home guarantee scheme loan (HGS)

    There are three schemes where the Commonwealth Government acts as a guarantor and allows you to avoid paying LMI. These schemes are

    The First Home Guarantee and Regional First Home Guarantee require a 5% deposit and the Family Home Guarantee requires a 2% deposit. Also, find out more on the Housing Australia website.

    hOW DO I FIND OUT IF I AM ELIGIBLE FOR AN LMI WAIVER?

    Happy couple receiving an LMI waiver

    At Mortgage World Australia we have the experience and expertise to quickly assess your situation and determine whether you qualify for an LMI waiver.

    So, get started today by calling us on 1300 66 12 11 or use the form below.

    FAQs

    Not sure? Have additional questions? Try here 

    There is a common misconception that LMI protects you, the borrower. LMI protects the lender if you can’t make your mortgage payments. You, as the borrower, are required to pay the LMI premium.

    If a borrower defaults on a loan and the lender forecloses on the property and makes a loss on the sale the Lenders Mortgage Insurance will reimburse the loss to the lender. The mortgage insurer then pursues the borrower for that amount!

    LMI kicks in when you borrow more than 80% of the property’s value. So, if your deposit is less than 20%, you’ll need to pay LMI unless you qualify for a waiver.

    A home loan with no LMI allows borrowers to potentially avoid LMI premiums in the tens of thousands of dollars as well as discounted interest rates.

      Yes, it is possible to pay no LMI on investment property loans. Please check with us for specific eligibility criteria related to LMI waivers.

      Yes, you can obtain an LMI waiver on multiple properties. Keep in mind that each lender may impose a limit on the amount of outstanding lending offered without LMI but this can be overcome by using multiple lenders.

      If you work in an eligible profession such as Accounting or Law some lenders may impose a minimum income requirement from $90,000 p.a. Even if you don’t meet this income requirement there may still be alternative options that don’t impose a minimum income threshold.

      The calculated LMI premium is based on the loan amount and the Loan to Valuation Ratio (LVR). The higher the loan amount and LVR the higher the LMI premium. Some ways you can decrease this expense are:

      • Contribute a larger deposit to lower the LVR. A gift from a relative would generally be acceptable.
      • Use a different lender. The LMI premiums can be very different at each lender, particularly in the $500k to $600k range.

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