First Buyer Guide

Start your adventure. Expert tips and guides to help you prepare as you set off on the path towards your first home.

Down Payment

The simplest way to avoid LMI is to simply pay at least 20% of your home loan down. If you can do that, you don’t need to worry.

Unfortunately, making down payments that large isn’t an option for many Australians. There are exceptions to paying LMI when your is over 80% of the value of property. Let’s look into those exceptions below:

Career Qualifications

Many lenders offer home loans free of LMI to professionals meeting certain criteria. The following careers and incomes allow you to skip out on LMI.


Doctors who meet the following criteria are typically qualified for no-LMI home loans:

  • Their loan size is under $4.5 million
  • The loan doesn’t exceed the property’s value
  • You are a member of the Australian Medical Association or another relevant body
  • You qualify as a preferred medical professional according to The Royal Australian College of General Practitioners

Professionals – accountants, lawyers, mining specialists

Other individuals can qualify for no-LMI home loans. These individuals are:

  • Law professionals
  • Finance professionals
  • Professional athletes and entertainers
  • Mining specialists

If you fall into one of the above categories, you may qualify if:

  • The loan size is under $2 million
  • The loan size is under 90% of the property’s value
  • You are a member of a relevant organization within your industry

You meet industry-specific criteria:

  • The legal professionals included lawyers, solicitors barristers, and judges
  • The finance professionals included are accountants, CFOs, finance managers, actuaries, and auditors
  • Mining specialists included are mine surveyors, quantity surveyors, geologists, and geophysicists
  • Professional athletes and entertainers must have an accredited manager or agent

Discounted LMI

There are several options available that can lower your LMI payments. These options are often easier to qualify for than the ones that waive your LMI entirely.

Defence Housing Authority Investments

If you or a family member were a Defence member, DHA properties can come with waived LMI.

Some lenders will waive 90% of your LMI when you purchase a DHA property for investment purposes. Doing so may be a good option for you. There are no specific work requirements to purchase a DHA property.

The main challenge in purchasing a DHA property is the potentially more stringent loan requirements.

Guarantor Loans

The other factors we’ve discussed might not apply to you. In that case, you can still avoid paying for LMI by getting a guarantor loan.

Guarantor loans enable you to tap into your home’s equity to secure part of your home loan. If you already own property, getting another kind of home loan will be easier. If you can qualify for a guarantor loan, you can avoid paying LMI.

First Time Home Buyers

First time home buyers are eligible for multiple forms of support. On top of government grants, some mortgage insurance companies provide discounts of 8% to 15%. As long as your deposit wasn’t borrowed from another source, you should qualify for an LMI discount.

To take advantage of first-time home buyers discounts, you need to get a loan from a lender that works with an LMI provider offering discounts. The discount is typically provided through lenders that negotiate with insurance companies to further incentivise first time home buyers.

Of course, go for discounted interest rates while you’re at it!

Other Ideas

Several factors go into determining your LMI payments. Understanding the factors that go into your rate will help you prepare or even take steps to lower it.

Your LMI rate will be determined by:

  • The size of your loan
  • Your loan to value ratio (LVR)
  • Your choice in lender and mortgage insurance provider
  • Proof of savings (If you can prove you have substantial savings, you may get a lower rate)
  • Your qualifications for guarantor loans

Alternatives To LMI

Some lenders will waive LMI if you agree to pay their “risk fee”. Because of the unpopularity of LMI, some lenders have created their own risk underwriting processes.

By paying lenders’ fees, you’re still providing them protection for their loan. This process also helps lenders avoid the fees associated with insurance policies.

These alternatives will typically be labelled:

  • Risk fees
  • Reduced Equity fees
  • Low Deposit Premiums

Consult The Experts

Getting the ideal home loan with LMI waiver is complex.
It’s best to work with a mortgage professional to ensure you get the deal that may save you on LMI and provide competitive rates. Our experts at Deals Mortgage are here to listen to your concerns. They will help you find the home loan that’s ideal for your circumstances.

  • Interest rates start at just 2.29%

Book a time

Speak to an agent now