The Brokers Brief – Lenders Mortgage Insurance

Ever had a client who gave up on buying because they didn’t have a 20% deposit…or couldn’t afford the LMI bill? Let’s clarify what that actually means.

Lenders Mortgage Insurance (LMI) is an insurance policy that the borrower pays when they have less than a 20% deposit. It protects the lender, not the borrower — and it can cost tens of thousands of dollars, depending on the loan size and deposit.

There are a few ways we can avoid paying lenders mortgages insurance, the most common are below;

1. First Home Guarantee – Not Just for First-Time Buyers

• 5% deposit required
• NO LMI
• Government-backed (NHFIC)
• Clients who haven’t owned property in the last 10 years are eligible again.

2. Single Parent Guarantee – 2% Deposit, No LMI

• Available to single parents and single legal guardians
• Just a 2% deposit required
• NO LMI

3. Professional LMI Waivers – Who’s Included? Many banks offer LMI waivers up to 90–95% LVR for select professionals.

Some of the eligible occupations include (varies by lender):

• Medical: Doctors, Dentists, Pharmacists, Optometrists, Vets
• Legal: Solicitors, Barristers, Judges, Lawyers
• Finance: Accountants, Financial Analysts
• Engineering: Engineers, Architects, Surveyors
• Allied Health: Physiotherapists, Chiropractors, Speech Pathologists
• Certain Executives and Company Directors (case-by-case)

4. Pepper Money’s New Policy – 90% No LMI

Pepper has just rolled out a 90% LVR loan with no LMI for most borrowers — a solid solution for people with good income and clean credit who might not tick every “bank” box.

Click below to watch the video and learn more;