Did you know that banks prefer to lend money to particular professions?
If you are a doctor, lawyer, accountant, nurse, architect or engineer, you may be eligible for special discounts or a lender may waive particular requirements for your loan.
The secret to getting the best possible interest rate is to apply with the right lender!
Each lender has their own pricing strategy, and tend to cut interest rates aggressively when they want more business. However when they are busy they are unlikely to approve a special discount for you.
Which discounts are available?
We have made agreements with some of our lenders to offer waived LMI for professionals.
In some cases we can help you borrow 90% of the property value (90% LVR) with no LMI or 105% of the purchase price if your parents guarantee your loan.
To qualify for this discount you must meet the following criteria:
- You must be borrowing less than $2.0 million.
- All professions are considered at 85% LVR.
- Finance professions which can qualify for 90% LVR are Accountants, Finance Managers, Auditors and Actuaries.
- Legal professions which can qualify for 90% LVR are Lawyers, Barristers and Solicitors.
- Mining and Resource professions which can qualify for 90% LVR are Engineers, Surveyors, Mine Surveyors, Quantity Surveyors, Geologists or Geophysicists.
- You must have an income over $150,000 p.a. or will soon be on a similar high income.
- You must have stable employment.
- You must have a credit history that is clear of defaults.
- You must be buying a standard property in a good location.
- You must have a strong financial position.
- You must not have a large amount of unsecured debts.
Each LMI waiver is considered on a case by case basis.
We need to present a case to our lenders and they need to agree to the discount. For this reason we cannot promise this discount for every client or give exact qualifying criteria.
Our specialist mortgage brokers know which banks can waive your LMI premium. Speak to our team on 1300 889 743 or enquire online today to find out if you can qualify for a professional discount.
Negotiated interest rate discounts
Interest rate discounts are normally expressed as a percentage below the bank’s Standard Variable Rate (SVR). Normally with a standard professional package you can get a discount of up to 0.7% below the SVR without any negotiation.
By negotiation we can often obtain the following interest rates:
- Loans over $250,000: 1.00% below the BSV (Special offer!).
- Loans over $500,000: 1.10% below the BSV (Special offer!).
- Loans over $1,000,000: 1.10% – 1.15% below the BSV.
- Loans over $1,500,000: 1.15% + below the BSV.
- Loans over $2,500,000: Discounts are negotiated on a case by case basis.
The Loan to Value Ratio (LVR) of your loan is the percentage of the value of your property that you are borrowing. So if your home is worth $1,000,000 and you are borrowing $800,000 then you have an 80% LVR.
Please note that the above rates are a guide only. There are many factors to consider when putting in a pricing request and lenders change their special pricing levels on a weekly basis.
Which bank will give you the best discount? Speak to our team on 1300 889 743 or enquire online today to find out if you can qualify for a professional discount.
Are you eligible for discounts?
The professions and industries listed below may be eligible for a negotiated discount for their home loans:
- Accountants (CPA preferred)
- Financial services professionals (income over $200,000)
- IT manager / consultant
- Manager (Income over $200,000)
- University Lecturers
- Other professions are considered if you have an income over $200,000
The exact discount that you can receive will depend on your profession, the amount that you are borrowing and the current funding environment.
Our specialist mortgage brokers are familiar with the lending policies of many of the major banks. Speak to our team on 1300 889 743 or enquire online today to find out if you can qualify for a professional discount.
Which professions are considered low risk borrowers?
Some professions can receive discounts, whilst for others special rates may not apply.
Banks monitor the performance of their existing customers and keep track of which professions make their payments on time, every time, and which tend to have higher rates of default on their home loans.
The lowest risk professions are:
- Government employees (federal and state preferred over local level)
- Australian Defence Force (ADF) staff (special discounts may be available)
If you work in these professions you may not be eligible for a special interest rate discount unless you are borrowing an exceptionally large amount.
However, lenders are more flexible with their lending policies for people in the above professions. In other words, they want your business because they know that the likelihood of you making your repayments on time is very high.
Some professions such as builders are known to be a significantly higher risk than other borrowers, and their loans will be scrutinised by the lenders, particularly if they are applying for a low doc loan.
However, it is best to enquire online or call us on 1300 889 743 to discuss your situation with one of our expert mortgage brokers. Depending on your circumstances discounts may still be made available!
Are you a high income earning borrower?
Banks target high income professionals as they tend to have more in savings and seek larger mortgages. Typically, banks will offer discounted interest rates to high income borrowers due to the size of their loan and not due to their profession.
The main professions and industries that tend to have higher loan amounts are:
- Business owners
- CEOs, directors, executives and managers
- Mining industry professionals
- Contractors (Note: Many lenders do not accept contractors)
If you are seeking a special discount for a loan based on its size alone then it must be for at least $500,000. However, you will get special pricing from most banks only when you borrow over $1,000,000.
Can high net worth borrowers qualify for discounts?
Australian banks define a high net worth borrower as someone who has net assets of at least $750,000 either here or overseas.
That being said, they often only offer special discounts to high net worth borrowers if they have net assets over $1,000,000 and a large mortgage.
The main types of high net worth customers that can seek special discounts are:
- Property investors
- Business owners
- Foreign investors
- Family groups
Did you know we have a special package for high net worth borrowers?
Experienced property investors often have total borrowings in excess of several million dollars, and so we are in a strong position to negotiate with the banks for a better deal.
Please note that the interest rate is usually one of the lowest concerns of serious investors, and that they tend to focus more on the terms and conditions of the loans and how much they can borrow.
Interestingly, it is possible for a group of people to negotiate with a bank to receive a discount together. Not every lender can offer this type of discount, and many limit it to family groups. If your entire family refinances to the one lender, then it is possible to negotiate a significant discount.
We can help you negotiate a discount!
As mortgage brokers, we know exactly which banks are trying to win market share by offering special discounts and which lenders are not interested in lowering their rates.
In addition to this, the banks offer us competitive discounts right away because they know that if they do not give us a good offer, then another bank will!
Please enquire online or call us on 1300 889 743 and one of our mortgage brokers will give you a call to discuss which special offers you may qualify for.