No LMI Home Loans | Apply Now with 5% Deposit

Buying a home is one of the biggest financial commitments most Australians will ever make. However, for many, saving up for a 20% deposit can feel like an insurmountable hurdle, especially as property prices continue to rise. It is possible to buy a house with less than 20% deposit, but then you will face the added expense of Lenders Mortgage Insurance (LMI).

But what if you could avoid LMI and secure a home loan with a deposit of only 5% or 10%? That’s where no LMI home loans come into play. In this guide, we’ll explain how No LMI home loans work, which banks offer no LMI, who is eligible, and the options available for your situation.

How No LMI Home Loans Work

No LMI home loans are designed to allow borrowers to secure a mortgage with less than 20% deposit, without having to pay LMI. No LMI home loans are typically only offered to specific groups of borrowers or through unique arrangements.

Here are the most common ways to access No LMI home loans:

1. Professional Loans: Certain lenders waive LMI requirements for borrowers in certain high-demand professions, such as doctors, accountants, or lawyers, due to their perceived financial stability.
2. First-Home Buyer Schemes: Government programs, such as the First Home Loan Deposit Scheme (FHLDS), allow eligible first-home buyers to purchase a property with a deposit as low as 5% without needing to pay LMI.
3. Guarantor Loans: In this arrangement, a family member (usually a parent) guarantees part of the loan by using the equity in their property, eliminating the need for LMI.

The best way to find out if you are eligible for No LMI Home Loans is to speak to a mortgage broker who specialises in No LMI home loans. Eden Emerald Mortgages is the best option, as they have more than two decades' experience with No LMI home loans and their services are 100% free of charge (they are paid a commission by the lender). Fill out the form below to get in touch, and begin your process of securing a No LMI home loan.

Types of No LMI Home Loan Options

Home Loans for Professionals

Certain professions, such as medical practitioners, teachers, and police officers, often qualify for No LMI home loans. These borrowers are considered low-risk due to their stable income and high earning potential. Click here to see a full list of banks that offer No LMI home loans for professionals. 

Below is a table of the most common professions that qualify for No LMI home loans. For a more in-depth list, see this article on which professions are eligible for LMI waivers.

Medical Professionals

Medical professionals are often eligible for No LMI home loans, due to their job security and high earning potential making them low-risk borrowers in the eyes of lenders. These are some of the medical professionals that can access No LMI home loans:

• Doctors: This category includes general practitioners, specialists, and surgeons.
• Registered Nurses: This also applies to dental nurses, midwives, Mothercraft nurses, midwifery professionals and nursing professionals.
• Dentists: Dentists and dental specialists are often included due to their high earning capacity.
• Optometrists: Includes orthoptists. 
• Pharmacists: Pharmacists working in various settings, including retail and hospital environments, are also eligible.
• Specialists: Medical specialists, such as anaesthetists, radiologists, and oncologists, are frequently eligible for No LMI home loans.

Healthcare Workers

Besides the medical professionals listed above, there are also plenty of healthcare workers that are eligible for No LMI home loans. Take a look at this comprehensive list:

• Health and welfare service managers
• Nurse educators and researchers
• Nurse managers
• Nursing support and personal care workers
• Dieticians
• Occupational Therapists
• Environmental health professionals
• Pharmacists
• Chiropractors, osteopaths, physiotherapists and podiatrists
• Speech professionals
• Audiologists
• Medical imaging professionals
• Diversional therapists
• Social workers and professionals
• Welfare workers and professionals
• Counsellors
• Psychologists
• Aged carers
• Disabled carers
• Carers, aides and special care workers
• Massage therapists
• Paramedics

Legal Professionals

Legal professionals are often able to access No LMI home loans thanks to their extensive training, strong earning potential, and the consistent demand for their expertise. Those eligible for LMI waivers typically include:

• Lawyers: Solicitors, barristers and partners can qualify for No LMI home loans.
• Judges: Due to their prominent and stable positions within the judicial system, judges and magistrates are also eligible.

Accounting and Finance Professionals

Accounting, auditing, and finance professionals are viewed as low-risk by lenders because of their financial expertise and high earning potential. Individuals typically eligible for No LMI home loans in these fields include:

• Chartered Accountants: Accountants who are members of professional bodies such as Chartered Accountants Australia and New Zealand (CA ANZ).
• Certified Practicing Accountants (CPAs): Members of CPA Australia are often eligible.
• Actuaries: Actuaries are regarded as stable, high-income professionals due to their specialised skills in risk management and financial analysis.

Teachers and Educational Workers

Teachers and University lecturers can access No LMI home loans, due to their job stability. Additionally, if you are an employee of any of these Education Employers you may be eligible:

• Government Schools (Primary, Secondary, Specialist)
• Non-Government Schools (Primary, Secondary, Specialist)
• Catholic Schools
• Universities
• TAFEs
• Preschools and Kindergartens
• Child Care Centres
• Family Day Care Australia
• Education Unions
• Department of Education and Training
• Private Colleges

Tutors, trainers (within a professional capacity and related to Education) and university students enrolled in Education are also eligible for No LMI home loans.  

Veterinarians

Veterinarians frequently qualify for No LMI home loans, thanks to their specialised training, reliable career opportunities, and substantial earning potential. 

First-Home Buyer Schemes

First-home buyer schemes in Australia are designed to make it easier for Australians to enter the property market by eliminating the need for Lenders Mortgage Insurance (LMI). One of the most popular initiatives is the First Home Guarantee (formerly known as the First Home Loan Deposit Scheme). Under this scheme, eligible first-home buyers can purchase a property with a deposit as low as 5% without paying LMI. The government acts as a guarantor for the loan, covering the difference between the borrower’s deposit and the 20% threshold typically required by lenders to avoid LMI. This support significantly reduces upfront costs, making homeownership more accessible.

Eligibility for first-home buyer schemes varies but generally includes factors such as income limits, property price caps, and limits on the type of properties. For instance, the First Home Guarantee sets maximum income thresholds ($125,000 for singles and $200,000 for couples) and property price limits based on the location of the property. Applicants must also be Australian citizens and meet specific residency requirements. These schemes are often limited to a fixed number of places each year, so timely applications are essential if you are hoping to secure a spot.

Once approved, first-home buyers can work with participating lenders to secure their no LMI home loan. The lender evaluates the borrower’s financial situation and processes the loan as usual, with the government’s guarantee acting as security for the lender. For assistance with a First-Home Buyer Scheme, it is recommended to speak to a mortgage broker who specialises in First-Home Buyers. Eden Emerald Mortgages is experienced with securing No LMI home loans for first-home buyers and their services are completely free. Fill out the form below to speak to them about any questions you have, or to begin your application.

Guarantor Home Loans

Guarantor home loans offer a practical pathway for borrowers to access no LMI home loans, making homeownership more achievable, especially for first-home buyers. In a guarantor loan arrangement, a family member—usually a parent—uses the equity in their property as additional security for the borrower’s home loan. This reduces the risk for the lender, eliminating the need for Lenders Mortgage Insurance (LMI), even if the borrower has less than a 20% deposit. By leveraging the guarantor’s property equity, borrowers can save thousands of dollars while securing a loan with a smaller deposit.

Accessing a guarantor loan begins with identifying a suitable guarantor willing to support your loan application. The guarantor must meet specific criteria, such as owning substantial equity in their property and demonstrating financial stability. Both the borrower and guarantor must agree on the terms, as the guarantor is legally obligated to cover any shortfall if the borrower defaults on the loan. Borrowers then approach a lender that offers guarantor home loans, providing all necessary documentation, including the guarantor’s financial information. The lender evaluates the application based on the borrower’s and guarantor’s combined financial positions before approving the loan.

While guarantor loans are an effective way to avoid LMI, they come with responsibilities for both parties. Borrowers must ensure they can meet repayment obligations, while guarantors need to understand the financial risks involved. Over time, borrowers can release their guarantor once they’ve built sufficient equity in their property, typically reaching the 20% deposit threshold. Guarantor home loans are an excellent solution for buyers with strong family support, offering a chance to save on upfront costs and enter the property market sooner.

If you want to apply for a guarantor home loan, or have questions regarding the process, reach out via the form below to get in touch with Eden Emerald Mortgages. They are an experienced mortgage broker who will guide you through the guarantor home loan process, and they charge zero fees (they are paid commission by the lender), so you have more money in your pocket.

Which Banks and Lenders Offer No LMI Home Loans?

Several major banks, including Commonwealth Bank, Westpac, ANZ, and NAB, offer No LMI home loans for eligible professionals. However, each lender has its own specific conditions and eligibility criteria. To navigate these options effectively, it’s wise to consult with a mortgage broker who can compare loan products and provide a clear understanding of the exact requirements for each lender.

Apply for a No LMI Home Loan Today

To start the process of securing a No LMI home loan, contact an expert at Eden Emerald Mortgages. Even if you are not ready to buy a home yet, you can ask them about any questions you have. Leave your details  in the form below and you will receive a call back as soon as possible. Alternatively, you can call EE Mortgages directly on (02) 9188 9398.

Conclusion

No LMI home loans offer Australians a way to enter the property market with a smaller deposit, while saving tens of thousands of dollars. To assist you to apply for a No LMI home loan, it is crucial to work with a top mortgage broker who can find the best loan products for you, maximise your borrowing capacity, and negotiate the lowest interest rates. If you prefer to apply for a No LMI home loan online without meeting a mortgage broker or lender in person, you can use an online mortgage broker.