Lenders Mortgage Insurance (LMI) is a one-off fee that a borrower pays to protect the lender if repayments on the loan cannot be made. Whether or not there will be LMI for first home buyers depends mostly on how much they’re borrowing. As a general rule, when borrowing less than 80% of the property price, you do not need to pay LMI. So, what about when borrowing more than 80%?
No LMI For First Home Buyers When Borrowing More Than 80%
Yes, LMI waiver for first home buyers are available even if you’re borrowing more than 80% of the property value if you fall under any of the following categories:- Earning more than $150,000 a year or will soon be on that income
- A specific kind of professional, such as a doctor, accountant, lawyer, mining engineer, professional athlete, or entertainment professional
- Buying a Defence Housing Australia property
- Getting help from a guarantor to buy your home
LMI Waiver For First-Home Buyers
With this waived LMI assessment tool, you can effortlessly discover the number of lenders offering waived LMI for first-home buyers like you and, even more importantly, determine precisely how much LMI you stand to save.
LMI Waiver With Government Schemes
There will be no LMI for first home buyers who qualify for the First Home Guarantee. In this scheme, first home buyers can get a home loan with a deposit of as little as 5% and save thousands on LMI fees. Here are the basic requirements:- You must be an Australian citizen or permanent over 18 years of age.
- You should have an income of less than $125,000 if you are a single applicant. For couples, the income is capped at $200,000.
- Couples may apply only if they are married or in a de facto relationship.
- You must be able to provide proof that you’ve never owned or held an interest in a property in Australia.
- The home should be to live in not use as an investment property. You must move in within six months of buying the property.
- There are price caps on properties in various states for each of the schemes. Please refer to the tables below.
Price Caps For First Home Guarantee
Region | FY 2022-23 |
---|---|
NSW – Sydney & regional centres (Newcastle, Lake Macquarie & Illawarra) |
$900,000 |
NSW – rest of state | $750,000 |
VIC – Melbourne & regional centre (Geelong) |
$800,000 |
VIC – rest of state | $650,000 |
QLD – Brisbane & regional centres (Gold Coast & Sunshine Coast) |
$700,000 |
QLD – rest of state | $550,000 |
WA – Perth | $600,000 |
WA – rest of state | $450,000 |
SA – Adelaide | $600,000 |
SA – rest of state | $450,000 |
TAS – Hobart | $600,000 |
TAS – rest of state | $450,000 |
ACT | $750,000 |
Northern Territory | $600,000 |
Jervis Bay Territory & NorfolkIsland | $550,000 |
Christmas Island & Cocos (Keeling) Islands | $400,000 |
Source: NHFIC