Lenders Mortgage Insurance guide
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. LMI figures are indicative ranges and vary by insurer, lender and borrower.
The good news is that avoiding it is more achievable than most people realise. Government schemes remove it entirely, and professional waivers now cover a far wider range of occupations than they did even two years ago.
The short version: LMI is a one-off premium payable when your LVR exceeds 80%. It protects the lender, not you, and the insurer can pursue you for the shortfall after a default. Most borrowers add it to the loan, which means paying interest on it for decades. It is not refundable and does not transfer to a new lender. Government schemes, a guarantor, or a professional waiver can remove it altogether.
What is Lenders Mortgage Insurance?
A one-off insurance premium charged when your deposit is under 20% of the property value. You pay it, but it insures the lender against loss if you default and the property sells for less than you owe.
The part that surprises people is what happens after a claim. If the lender recovers a shortfall from the insurer, the insurer can then pursue you personally for that amount. LMI does not write off your debt, it moves who is chasing it.
It also does nothing for you if you lose your job, fall ill or cannot make repayments. That is what income protection or mortgage protection insurance is for, and they are separate products entirely.
Premiums are set by the mortgage insurers, principally Helia and QBE, rather than by your lender, though some lenders run their own arrangements.
How much does LMI cost?
It rises steeply with LVR rather than in a straight line. Moving from 90% to 95% typically costs far more than moving from 85% to 90%, because the insurer's risk climbs faster at the top.
| LVR | Deposit | Indicative LMI on a $600,000 loan |
|---|---|---|
| 80% or below | 20% or more | None |
| 85% | 15% | Around $9,000 to $12,000 |
| 90% | 10% | Around $15,000 to $24,000 |
| 95% | 5% | Around $23,000 to $37,000 |
Indicative published ranges for a loan of this size, current at 2026. Premiums scale with loan size, so larger loans cost considerably more. On a property around $1 million, a 90% purchase can comfortably exceed $20,000 and a 95% purchase can push past $40,000. Two borrowers at the same LVR can be quoted materially different premiums, so get a quote rather than relying on a table.
Capitalising it costs more than the premium
Most borrowers add the premium to the loan rather than paying it at settlement. That does two things worth understanding. It raises your recorded LVR, so a $450,000 loan with a $15,000 premium becomes $465,000 and around 93%, and lenders typically use that higher figure to set your rate. And you pay interest on it for the full term. A $20,000 premium capitalised into a 30-year loan at 6.5% costs roughly $45,000 by the time it is repaid.
Paying upfront avoids the interest entirely, if you have the cash. Our mortgage repayment calculator shows the difference.
LMI is not refundable and does not follow you. Partial refunds for selling or refinancing early have been largely phased out by the major insurers, so treat the premium as gone once paid. It also insures one specific loan with one specific lender. Refinance while still above 80% and the new lender requires a fresh policy, which means paying in full a second time. Getting below 80% before you refinance is the way to avoid that.
Can you get an LMI waiver for your profession?
Quite possibly, and the list is much longer than it used to be. Select lenders waive LMI entirely for eligible professionals borrowing up to 90% of a property's value, and up to 95% in some cases.
The logic is straightforward. Lenders see certain occupations as having stable, rising income and low default rates, so they compete for those customers by removing the premium. It is a commercial decision, not a government programme, which is why it varies so much.
Which professions qualify?
As of 2026 the eligible list spans medical and health practitioners, veterinarians, lawyers, accountants, banking and finance employees, technology sector employees, engineers, and senior federal government staff. Allied health is now well represented, and nurses and midwives, excluded for decades, are covered at select lenders up to 90% LVR. Enrolled nurses are generally still outside the medical waiver at most banks.
We maintain dedicated pages for the professions we see most often: doctors, dentists, lawyers, accountants, actuaries, auditors, bankers, pharmacists, veterinarians, optometrists, physiotherapists, chiropractors, osteopaths, podiatrists, psychologists and sonographers. Our no LMI home loan page covers how the waivers work in practice.
What to watch for
There is no single universal policy, and that is the whole point. Some lenders keep a narrow list covering doctors and dentists only. Others define eligibility broadly enough to include allied health, legal and engineering roles. Approaching the wrong lender first can mean paying a premium you never needed to pay.
Some lenders also apply a minimum income to allied health applicants, in the order of $90,000 or $150,000 a year, though several second tier lenders have removed those thresholds to compete with the majors. Most require full time employment, or two or more years in the field with verified income if you are part time or self employed. You will need registration certificates or professional body membership as evidence.
Waivers are not just for first home buyers. Depending on the lender, a professional waiver can apply to owner occupied or investment purchases and to refinances, at loan sizes well into the millions. If you qualify and you are refinancing above 80%, this is the difference between paying a second premium and paying nothing.
Think your profession might qualify?
We know which lenders cover which occupations, and the income thresholds that apply. Getting the lender match right is the whole game. $0 cost to you.
What are the other ways to avoid LMI?
A 20% deposit, a government scheme, or a guarantor. Each removes the premium in a different way and suits a different situation.
A 20% deposit
The cleanest route. At or below 80% LVR no premium applies, you get the widest lender choice and generally the sharpest rates. The question is whether the time it takes to get there costs you more than the premium would have.
The 5% Deposit Scheme
The Australian Government 5% Deposit Scheme lets eligible buyers purchase at 95% LVR with no LMI, because Housing Australia guarantees part of the loan instead. There are no income caps and no limit on places. Single parents can access it at 2%. On a purchase where the premium would otherwise run to $23,000 or more at 95% LVR, that is the saving. Our benefits and risks guide covers the trade-off in buying with so little equity.
Help to Buy
Help to Buy removes LMI by shrinking the loan itself, with the government taking an equity share of up to 40% on a new home. Income limits apply and you cannot combine it with the 5% Deposit Scheme.
A guarantor
A guarantor loan uses a family member's property as additional security. The lender is secured across two properties, your effective LVR drops below 80%, and no premium applies. The guarantee can usually be released once your own LVR falls far enough.
Building the deposit faster
The First Home Super Saver scheme, the NSW First Home Owner Grant and the stamp duty exemption do not remove LMI directly, but each frees up cash that can push your deposit over a threshold. Our deposit options guide compares them.
Should you pay LMI or keep saving?
It depends on the gap and the market. If you are months from 20%, waiting usually wins. If you are years away, the premium can be cheaper than the rent and price growth you absorb while saving.
Buying sooner means you stop paying rent, start building equity, and capture any growth rather than chasing it. In a rising market, waiting two years to save another 10% can cost more than the premium ever would.
Waiting means no premium, a smaller loan, less interest across the term, lower repayments and access to better rates. In a flat or falling market that is usually the stronger position.
The honest answer needs your numbers: current rent, saving rate, target suburb and how the premium compares. Before deciding, check whether a waiver or a scheme removes the question entirely, because that changes the maths more than any forecast. Start with pre-approval and our budgeting guide.
Frequently asked questions
How much does LMI cost?
On a $600,000 loan, published estimates run around $9,000 to $12,000 at 85% LVR, $15,000 to $24,000 at 90%, and $23,000 to $37,000 at 95%. Premiums scale with loan size, so a purchase around $1 million can exceed $20,000 at 90% and push past $40,000 at 95%. Get a quote rather than relying on a table.
Which professions can get an LMI waiver?
As of 2026 the list spans medical and health practitioners, veterinarians, lawyers, accountants, banking and finance employees, technology sector staff, engineers and senior federal government employees. Allied health is well represented, and nurses and midwives are now covered at select lenders up to 90% LVR. Eligibility varies by lender, so see our no LMI home loan page.
Is LMI refundable if I sell or refinance early?
Assume not. Partial refunds have been largely phased out by the major insurers. LMI insures one loan with one lender, so refinancing while still above 80% means a new policy and a second premium in full. Getting below 80% first avoids it.
Does LMI protect me if I cannot make repayments?
No. It protects the lender only. If the lender recovers a shortfall from the insurer after a default, the insurer can pursue you personally for that amount. For your own protection you need income protection or mortgage protection insurance, which are separate products.
Can I pay LMI upfront instead of adding it to the loan?
Yes, most lenders offer both. Paying upfront avoids interest on the premium. Capitalising it raises your recorded LVR, which lenders typically use when setting your rate, and a $20,000 premium on a 30-year loan at 6.5% costs roughly $45,000 once interest is counted.
Is LMI tax deductible?
Not for owner occupiers. On an investment property the premium may be deductible over a number of years as a borrowing cost. Tax treatment depends on your circumstances, so speak with your accountant.
Can a guarantor remove LMI?
Yes. A guarantor loan adds a family member's property as additional security, so the lender is secured across two properties and your effective LVR falls below 80%. No premium applies, and the guarantee can usually be released once your own LVR drops far enough.
Does a higher income avoid LMI?
Not on its own, because LMI follows your LVR rather than your income. Income does matter for professional waivers though, since some lenders apply minimum income thresholds to allied health applicants, and it affects how much you can borrow.
Does the property type affect LMI?
Yes. Small apartments, high density buildings, rural properties and unusual security types can attract tighter LVR limits or higher premiums, because insurers and lenders see them as harder to sell. Our strata guide covers what lenders look at.
Next steps
Before you accept a premium, check three things: whether your occupation qualifies for a waiver, whether you are eligible for the 5% Deposit Scheme, and whether a guarantor is realistic. Any one of them can remove the cost entirely.
Then model the numbers with our property deposit calculator and mortgage repayment calculator, and read the LVR guide for the number that triggers all of this.
Learn more about our team, or see our service areas across 220+ Sydney suburbs.
Find out if you can avoid LMI
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Email: hello@buyvest.com.au
Related resources
No LMI home loans | LVR explained | 5% Deposit Scheme | Guarantor loans | Deposit options | Genuine savings | Bank valuations
Service areas: 220+ suburbs across Sydney including Ryde | Parramatta | Baulkham Hills | Gladesville | Penrith | Chatswood | Castle Hill | Epping | Hornsby | Blacktown | Bankstown | Hurstville | Sutherland | Manly | Bondi | Sydney CBD and more
This article is general information only and does not take your personal circumstances into account. LMI premiums are set by insurers and vary by lender, loan size and borrower, so figures here are indicative ranges rather than quotes. Professional waiver eligibility, LVR limits and income thresholds differ between lenders and change over time. Confirm your position with a licensed broker or lender before relying on it. For tax questions, speak with your accountant. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
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