Unlock the secrets to No LMI Loans and who pays for it

What is Lenders Mortgage Insurance?

Lenders Mortgage Insurance is a policy that protects the lender if you default on your loan. You pay the premium, but the lender is the beneficiary. It applies when your deposit is less than 20% of the property value, which means you are borrowing at an LVR above 80%.

The premium is calculated based on your loan amount and deposit size. A nurse borrowing 90% of a property's value might pay between $8,000 and $15,000 in LMI, depending on the lender and loan size. A midwife borrowing 95% could see that figure climb closer to $20,000 or more. The cost is either paid upfront at settlement or added to your loan amount, where it accrues interest over the life of the loan.

Consider a registered nurse purchasing an investment property with a 10% deposit. The LMI premium is capitalised into the loan. Over 30 years, that added amount increases the total interest paid. It is not a small line item.

Who Pays for LMI?

You do. Even though the policy protects the lender, the borrower covers the cost. It is non-refundable and does not build equity or reduce your loan balance in any meaningful way beyond the initial capitalisation.

Some borrowers assume LMI is negotiable or that it can be waived through loyalty or a higher interest rate. It cannot. The premium is set by the insurer, not the lender. The only way to avoid it is to meet specific criteria that allow the lender to bypass the requirement altogether.

How Registered Nurses and Midwives Can Avoid LMI

Most major lenders offer LMI waivers for nurses and midwives who meet eligibility requirements. These waivers allow you to borrow up to 90% or sometimes 95% of a property's value without paying the premium.

Eligibility typically requires registration with AHPRA, a minimum income, and evidence of stable employment. Some lenders extend the waiver to nurse practitioners, enrolled nurses, and midwives, while others limit it to registered nurses. The specific requirements vary between lenders, but the principle remains the same: the lender accepts the higher LVR without requiring insurance because they view your profession as lower risk.

A midwife with a 10% deposit could access a no LMI loan and save the premium entirely. That amount stays in your offset account or goes toward furniture, stamp duty, or other upfront costs. The difference is immediate and tangible.

The Difference Between a Professional Waiver and a Family Guarantee

A professional LMI waiver is income-based and relies on your occupation. A family guarantee involves a parent or family member using equity in their property to support your loan. Both strategies allow you to borrow with a smaller deposit, but the structure and risk profile differ.

With a professional waiver, you are the sole borrower. The lender assesses your income and serviceability without involving another party. With a family guarantee, your guarantor's property is used as additional security, which means they carry some risk if you default. The guarantor is not responsible for your repayments, but their property secures a portion of the loan until you build enough equity to release them.

In our experience, nurses who qualify for a professional waiver prefer it because it keeps the loan independent. A family guarantee is a valuable option for those who do not meet the income threshold or who are purchasing above 90% LVR, but it introduces complexity that a waiver avoids.

High LVR Lending Without LMI: What Lenders Allow

Some lenders waive LMI up to 90% LVR, while a smaller group extends the waiver to 95%. The difference matters if you are working with a limited deposit or if you want to retain cash for other purposes.

A registered nurse borrowing at 90% LVR with no LMI is relatively common. Borrowing at 95% LVR without the premium is less widely available and usually comes with stricter income requirements and lending criteria. The interest rate may also differ depending on the LVR, even when LMI is waived.

Before assuming you can borrow at 95%, check whether your income and employment type meet the lender's serviceability benchmarks. Agency nurses or those with income that includes shift penalties may need additional documentation to satisfy the lender's assessment.

Interest Rates and How They Compare Across LVR Bands

A loan with a waived LMI premium does not always carry the same interest rate as a loan with a 20% deposit. Some lenders apply a rate loading for high LVR lending, even when the insurance cost is removed. Others offer the same rate regardless of deposit size, provided you meet their professional criteria.

The rate difference is usually small, often between 0.10% and 0.30%, but it compounds over time. Before committing to a lender based solely on the LMI waiver, compare the interest rate, ongoing fees, and features like offset accounts or redraw facilities. A slightly higher rate with better loan features may deliver more value than a lower rate with limited flexibility.

If you are refinancing and your current LVR has dropped below 80%, you may also be eligible for a lower interest rate without needing the waiver. It depends on your equity position and the lender's pricing.

What Happens If You Refinance Before Reaching 80% LVR

If you used a professional LMI waiver to purchase your property and you refinance within the first few years, your LVR may still be above 80%. Some lenders will extend the waiver on refinance if you remain within their professional criteria. Others will not, which means you could face an LMI charge with the new lender unless your equity has increased enough to bring the LVR below 80%.

This is particularly relevant for nurses refinancing to access equity for renovations or investment purposes. Before refinancing, calculate your current LVR and confirm whether the new lender will waive LMI or whether you need to wait until your equity position improves.

Comparing No LMI Loans to the Home Guarantee Scheme

The Home Guarantee Scheme allows eligible first home buyers to purchase with a 5% deposit without paying LMI. The government acts as guarantor for a portion of the loan, which removes the lender's need for insurance.

A professional LMI waiver does not require government involvement and is not limited to first home buyers. If you are a registered nurse purchasing your second property or an investment, the waiver remains available. The Home Guarantee Scheme does not.

For a first home buyer who qualifies for both options, the decision often comes down to deposit size and property price caps. The scheme has annual limits and property value restrictions that vary by state. A professional waiver does not, though lender-specific lending limits still apply.

Using Saved LMI Costs to Strengthen Your Deposit Position

Avoiding a $12,000 LMI premium gives you options. You can hold that amount in an offset account to reduce interest from day one, use it to cover stamp duty and legal fees, or allocate it toward minor renovations that increase the property's value.

We regularly see midwives who saved on LMI redirect those funds into their mortgage offset, which reduces the interest charged without locking the cash away. Over the first five years, that strategy can save several thousand dollars in interest compared to capitalising the LMI premium into the loan.

Another option is using the saved amount to reach a lower LVR band, which may unlock access to lenders with sharper interest rates or more flexible loan features. A 12% deposit with no LMI may open doors that a 10% deposit with LMI does not.

Eligibility Requirements for Nurses and Midwives

To access a professional LMI waiver, most lenders require current AHPRA registration, a minimum annual income of around $90,000, and evidence of permanent or ongoing employment. Some lenders accept contract roles if the history is stable, while others require permanent employment only.

The income threshold may be lower for some lenders and higher for others, particularly at 95% LVR. If your base income falls slightly below the threshold, some lenders will include regular overtime or shift allowances, while others assess base salary only.

If you are a newly registered nurse or midwife and your income does not yet meet the threshold, a guarantor loan may bridge the gap until your income increases. Alternatively, waiting six months and applying once your payslips reflect a higher income can shift your eligibility.

When LMI Cannot Be Waived

Not all properties or loan types qualify for an LMI waiver, even if you meet the professional criteria. Investment properties are sometimes excluded, depending on the lender. Rural or regional properties may fall outside acceptable postcodes. Some lenders will not waive LMI for refinances, only purchases.

If you are buying a property that does not qualify, the alternative is waiting until you have saved a 20% deposit or exploring a family guarantee to avoid the premium. There is no universal waiver across all lenders and all property types, which is why working with a broker who understands which lenders accept which scenarios is necessary.

Call one of our team or book an appointment at a time that works for you. We will confirm your eligibility, compare lenders who waive LMI for your profession, and structure your loan to keep more of your deposit working for you rather than disappearing into an insurance premium.

Frequently Asked Questions