How to Avoid LMI

1. Save a 20% deposit, or use a gift from family

A 20% deposit keeps your LVR at 80%, the point where LMI usually stops.

Who it suits:

buyers with savings, or with family willing to gift part of the deposit.

Deposit needed:

20% of the lower of the price or the lender's valuation, plus purchase costs. Work out the exact figure for your price with the home deposit calculator.

What it saves:

all of the LMI: about $12,600 on a $700,000 home in NSW against a 10% deposit.

The catch:

time, and prices can move while you save. CommBank says its LMI line can sit below 80% in some circumstances, so ask your lender about its rule at exactly 80%.

Gifts:

lenders treat gifted money differently, so ask yours before you count on it. NAB, for example, asks for a letter from the person giving you the money, setting out how much they are contributing and any repayment conditions. St.George asks for proof of genuine savings only where your LVR is above 90%.

2. Use the 5% Deposit Scheme

The Australian Government 5% Deposit Scheme (formerly the Home Guarantee Scheme) lets eligible first home buyers buy with a 5% deposit and no LMI. Single parents and single legal guardians need 2%, through the Family Home Guarantee.

Who it suits:

first home buyers, or people who have not owned property in Australia in the last 10 years; single parents or single legal guardians of a dependent child. You must be an Australian citizen or permanent resident aged 18 or over, and you must live in the home.

Deposit needed:

5%, or 2% for single parents.

What it saves:

all of the LMI: about $27,900 on a $700,000 home in NSW with a 5% deposit.

The catch:

a price cap by state and area (in NSW, $1,500,000 in Sydney and the regional centres and $800,000 elsewhere, as at 29 September 2026). You apply only through a Participating Lender, and Macquarie, ING and BOQ were not on the list on 28 September 2026. If you move out while your LVR is above 80%, the guarantee can end and your lender may require LMI.

Eligibility, every price cap and the LMI it replaces are on the 5% Deposit Scheme page. What first home buyers pay when the scheme does not fit is in LMI for first home buyers.

3. Buy with Help to Buy shared equity

Help to Buy lets you buy with a 2% deposit while the Australian Government pays up to 30% of an existing home's price, or 40% of a new home's, in exchange for an equity share. You pay no LMI at purchase, because your deposit and the government's share together cover at least 20% of the lender's valuation.

Who it suits:

Australian citizens aged 18 or over who own no property anywhere and will live in the home, with taxable income at or below $103,000 (single) or $165,000 (single parents and couples) on the FY2026 Notice of Assessment, as at 29 September 2026. Permanent residents cannot apply, and you do not need to be a first home buyer.

Deposit needed:

at least 2%, but you must put in the most you can reasonably afford.

What it saves:

all of the LMI. The government’s own example: an $800,000 home with a $16,000 deposit, a $544,000 loan and a $240,000 government contribution, an LVR of 68%.

The catch:

you are the only owner on the title, but the government holds an equity share secured by a second mortgage. You pay no interest or rent on it, and you repay its share of the home’s value, not the dollar amount it put in, when you sell or buy it back. There are 10,000 places a year. You cannot combine it with the 5% Deposit Scheme, another shared equity scheme, or a state loan or guarantee, though first home owner grants and stamp duty concessions are still allowed.

Price caps:

from $400,000 on Christmas Island and the Cocos (Keeling) Islands to $1,300,000 in Sydney and six NSW regional centres. In NSW and Darwin they are lower than the 5% Deposit Scheme caps, so check your area on the official price cap page.

Where to apply:

through a Participating Lender. On 29 September 2026 there were six brands from three institutions: Bank Australia, Commonwealth Bank, and the mutual behind Teachers Mutual Bank, which also runs Health Professionals Bank, Firefighters Mutual Bank and UniBank. The list is still growing.

Check the official Help to Buy page before you apply. The caps, lenders and how it compares with the 5% Deposit Scheme are on our Help to Buy scheme page.

4. Get a profession LMI waiver

Some lenders waive LMI for listed professions, usually up to 90% LVR and up to 95% for some medical roles.

Who it suits:

doctors, dentists, lawyers, accountants and some allied health workers, depending on the lender.

Deposit needed:

as little as 10% at CommBank for doctors, lawyers and accountants. At Westpac and ANZ, eligible doctors, specialists and dentists can borrow up to 95% (a 5% deposit).

What it saves:

all of the LMI: about $12,600 on a $700,000 home in NSW at 90% LVR. ANZ’s own waiver sheet for legal professionals puts the LMI saved at $17,699 on an $800,000 purchase with an $80,000 deposit.

The catch:

a waiver is a lender policy, not a right, and the lists and limits change. Nurses qualify at some lenders and not others: Westpac waives LMI for registered nurses and midwives earning at least $90,000, up to 90% LVR, while ANZ lists nurses as ineligible.

Compare professions and lenders on the LMI waiver page. Doctors, specialists and dentists get the highest limit, up to 95% at Westpac and ANZ: see home loans for doctors. Engineers have no published waiver: see home loans for engineers.

5. Use a family guarantee

A family member offers equity in their own property as extra security. That brings your LVR to 80% or below, so no LMI applies.

Who it suits:

buyers with a close relative who has equity. St.George accepts parents, siblings, sons and daughters; Westpac accepts parents, a legal guardian, siblings or a child over 18.

Deposit needed:

can be nil: both St.George and Westpac lend up to 100% of the price plus costs with a guarantee.

What it saves:

all of the LMI: about $12,600 on a $700,000 home in NSW against a 10% deposit.

The catch:

your guarantor agrees to repay part of the loan if you cannot, and their property backs it. The rules differ by lender: see the family guarantee rules below.

6. Borrow from a state government lender

Four state and territory lenders offer home loans with small deposits, and all four state they charge no LMI (checked 29 September 2026).

These are the lenders' own loans, so you apply to them, not to a bank.

7. Use equity in a property you already own

If you already own property, you may be able to put its equity into your next purchase. CommBank and NAB both say lenders usually let you borrow up to 80% of your home's value, less what you still owe.

Who it suits:

upgraders and investors who already own property.

Deposit needed:

possibly no cash. You can release equity with a top-up or a separate loan, or offer your home as extra security for the new loan, which Westpac calls cross-collateralisation. When two properties secure your loans, the lender looks at the total you owe against the total value it holds as security.

What it saves:

all of the LMI, as long as the total stays at or below 80%: about $12,600 on a $700,000 purchase in NSW against a 10% deposit.

The catch:

“You may also be asked to pay for LMI if you’re refinancing, restructuring a home loan, or topping one up, where the limit of the loan is greater than 80% of the value of the security” (Westpac).

Check where your numbers land with the LVR calculator.