Lenders’ Mortgage Insurance (LMI) is insurance that protects the lender, not you. It’s usually a one-off, non-refundable, non-transferrable payment made by the borrower at the time of loan settlement.
How to waive LMI for first home buyers in Australia
First home buyers in Australia can waive LMI in a number of ways:
1. Government schemes
The Australian government offers a number of schemes that can help first home buyers waive LMI. These schemes include:
- The First Home Loan Deposit Scheme (FHLDS)
- The First Home Guarantee
- The New Home Guarantee
2. Low deposit home loans
Some lenders offer low deposit home loans that do not require LMI. However, these loans typically have higher interest rates than conventional home loans.
3. Using a guarantor
Some lenders offer home loans that do not require LMI if you have a guarantor. A guarantor is someone who agrees to be responsible for the loan if you default.
4. Eligible profession
The below are common professions that can be eligible by lenders for an LMI waiver:
- Medical professionals
- Lawyers
- Accountants
- Engineers
- Teachers
- Nurses
- Police officers
- Firefighters
- Members of the armed forces
- Entertainment industry professionals
- Employees of Defence Housing Australia
This list can change with each lender. Be sure to ask your lender or mortgage broker if you qualify for an LMI waiver. Waiving your LMI can potentially save you thousands of dollars upon your property purchase. If you are going to apartment inspections, make sure you bring the apartment inspection checklist on your walkthroughs of the property.
