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When applying for a home loan, borrowers with a deposit under 20% often need to pay Lenders Mortgage Insurance (LMI)—a significant additional cost. However, in specific circumstances, lenders may waive this requirement. These LMI waived loans are typically offered to professionals in certain industries or to borrowers with a strong financial profile. While the benefit is clear—substantial savings upfront—the documentation requirements remain rigorous.
Proof of Identity
As with all financial products, establishing your identity is the first step. Lenders will usually ask for:
- A valid passport or driver’s licence
- Medicare card or another secondary form of ID
- Proof of residency status if you’re not an Australian citizen
These documents confirm who you are and ensure compliance with anti-money laundering laws.
Evidence of Income
Lenders assess income stability to determine your borrowing capacity. For employees, this usually includes
- The two most recent payslips
- An employment contract or a letter from your employer
- Recent group certificates or PAYG summaries
Self-employed applicants will need:
- At least two years of personal and business tax returns
- Business activity statements (BAS)
- An accountant’s letter verifying income
Lenders prefer consistent income over time, especially for higher-risk loans where LMI is waived.
Professional Qualification and Employment Status
LMI waivers are commonly offered to professionals in fields such as medicine, law, engineering, and accounting. To access these benefits, borrowers must provide:
- Proof of professional registration or membership (e.g., AHPRA for healthcare professionals)
- A university degree or relevant certification
- Confirmation of current employment in that profession
This documentation reassures lenders that the borrower has a reliable and high-income career.
Deposit and Savings Records
Even with an LMI waiver, you still need to show you’ve saved the required deposit—usually 10% of the purchase price. Acceptable documents include
- Bank statements showing consistent savings over time
- Gift letters (if part of your deposit is a gift)
- Term deposit summaries or investment account statements
Some lenders may also require evidence of genuine savings, not just lump sum transfers.
Credit History and Liabilities
Your lender will also request:
- A copy of your credit report
- Details of any outstanding loans or credit cards
- Statements for personal loans, car finance, or other debts
This helps assess your ability to repay the new loan responsibly.
Preparation Makes the Difference
Although lmi waived loans can offer substantial savings, they come with strict eligibility and documentation requirements. Being organised and submitting complete, accurate documents is key to improving your chances of approval.
