ANZ the latest bank to waive Lenders Mortgage Insurance for lawyers and accountants
If you’re a homebuyer working in law or accounting, then it could be your lucky day.
ANZ has become the latest bank to extend its Lenders Mortgage Insurance waiver from doctors (offered by banks across the board) to accountants, lawyers and solicitors taking out a home loan with just a 10% deposit.
Lenders Mortgage Insurance (LMI) is typically charged when you have below 20% of the deposit saved up. But a wider range of high-income professionals could now be eligible to borrow as much as 90% of the property value from ANZ while dodging this hefty cost, potentially saving them thousands of dollars.
“In the past, the LMI waiver was only available to doctors because they were generally considered the lowest risk of all professions. Now the banks seem to have a bigger appetite for risk and are looking at accountants, solicitors and lawyers who at least pose a lower risk than other borrowers around,” Mozo’s Property Expert, Steve Jovcevski said.
“Since we’ve had the credit criteria restricted, banks have really been on the lookout for good quality customers, so this move could be part of ANZ’s efforts to attract more of these better quality borrowers and get better quality loans on the books. The benefit for them is a lower arrears rate and lower cost of funding.”
According to Jovcevski, the extended waiver is a huge positive for eligible ANZ customers who can borrow up to $2.7 million per property without paying LMI.
“It’s a win-win for those customers who want to borrow bigger amounts. Generally, LMI doesn’t even insure million-dollar home loans, so you wouldn’t even be able to buy the more expensive properties with a 10% deposit. You would have had to wait until you had 20% in your pocket.”
“The one risk is that you might borrow too much and end up with much higher repayments that don’t work with your budget down the track. So just be mindful of that when you’re borrowing that extra money from ANZ,” he added.
Am I eligible for ANZ’s waiver?
To qualify for ANZ’s LMI waiver, you’ll need to tick a few boxes:
- You (and your joint borrowers) are Australian citizens or permanent residents.
- You’re borrowing no more than $2.7 million for one property, up to a maximum combined amount of $7 million for all of the mortgages you take out with ANZ.
- If multiple borrowers are involved, the eligible applicant must hold at least an equal interest in the property value as the other borrowers. For instance, if you’re a chartered accountant and you’re buying a house with a teacher, at least 50% of the property must belong to you.
If you’re an accountant, you must also hold current membership to one of the following industry bodies, and provide evidence that you are a member (either an invoice confirming proof of purchase, an internet printout, or a copy of your certificate):
- Chartered Accountants Australia & New Zealand (CA) - including Global Accounting Alliance
- Certified Public Accountant (CPA) - including recognised partnering professional bodies
- Chartered Financial Analyst Institute (CFA)
- Fellowship of the Institute of Actuaries of Australia (FIAA)
If you’re a legal professional such as a lawyer, barrister and solicitor, you’ll need to show proof of a current practising certificate issued by the relevant state or territory legal practice regulatory body.
For judicial officers including judges and magistrates, you’ll be required to hand in a copy of your current commission or letter of appointment, or another document confirming you’re a current judicial officer (e.g. payslips, tax return).
How to save on LMI if you aren’t a doctor, lawyer or accountant
But what if you’re not a doctor, accountant or legal professional, and not earning a high salary every year? The good news is, no matter where you work, you can still avoid the cost of LMI in a couple of ways:
- Save a 20% deposit: The best cure is prevention, so waiting till you’ve saved up a 20% deposit (especially if you’re already close to the target amount) means you won’t even have to worry about LMI in the first place.
- Get a guarantor: You can avoid pesky LMI premiums by asking your parents or guardians to put their name next to yours on a home loan application. But since their home will be secured against your loan, it’s crucial you stay on top of repayments. Or if you’re a first home buyer, you could try applying for the recently launched First Home Loan Deposit Scheme where eligible borrowers with as low as a 5% deposit could be granted a special government guarantee that helps them dodge LMI.
On the hunt for a hot home loan this year? Head over to our home loans comparison table to compare your options today.