AussieClinicians Pay and Finance for Australian Doctors & Nurses
Doctors Nurses
Home › Guides › Doctor home loans

Doctor Home Loans: How LMI Waivers Work

Buy a home with less than a 20% deposit and the bank usually makes you pay for its own insurance: lenders mortgage insurance, which can run past $10,000 and protects the bank rather than you. Doctors are one of the few professions banks will waive it for, which means buying with as little as a 5% deposit and keeping the premium.

The LMI waiver at a glance
Checked against lenders' published pages, 14 and 16 August 2026
  • LMI: a one-off premium, over $10,000 in a bank's own published example, charged when your deposit is under about 20%. It protects the bank; you just pay it.
  • The waiver: published medico policies remove it on loans of typically up to 95% of the property's value, which means a deposit as small as 5%; sometimes 100% (owner-occupied).
  • What that buys: on a $700,000 purchase, a $35,000 deposit instead of $140,000, and no premium.
  • The flip side: a smaller deposit means a larger loan and more interest; the income test still applies.

What LMI actually is

In plain terms
What it is Insurance on your home loan that you pay for once, at settlement. It exists because a small deposit makes the loan riskier for the bank.
Who it protects The bank, not you. If you default and the sale of the property does not cover the loan, the insurer pays the bank's shortfall; you get nothing for the premium.
When you pay it When your deposit is under about 20% of the bank's valuation of the property. At 20% or more it simply never applies.
What it costs A bank's own published example: over $10,000 on a $500,000 loan with a $50,000 deposit. It can be added to the loan rather than paid upfront, and then you pay interest on the premium too.

A $700,000 purchase, three ways

Upfront deposit, and whether LMI applies
Bars scaled to dollars; the LMI segment is drawn at the $10,000+ of a bank's own published example on a smaller loan. Stamp duty and purchase costs apply in every case and are not shown.
Standard buyer avoiding LMI: 20% deposit
$140,000 saved before you can buy
Typical buyer with 5% down: smaller deposit, but LMI applies
$35,000 deposit + an LMI premium in the order of $10,000+
Doctor with a waiver: 5% down, no LMI
$35,000 deposit, premium waived
DepositLMI premium
  • First home buyers can sometimes avoid LMI on a 5% deposit through the Australian Government 5% Deposit Scheme, a separate route from the doctor waiver.

What the smaller deposit is actually worth

The differenceOn the $700,000 example
Years of saving At $2,000 saved a month, a $140,000 deposit takes about six years and a $35,000 deposit about eighteen months, so you can buy roughly four and a half years sooner. Your savings rate moves both numbers.
Capital that stays yours The $105,000 you did not put into the deposit is still your money: an emergency buffer or any other goal. Without the waiver it is locked into the property from day one.
The premium itself The $10,000+ that would have gone to the bank's insurer never leaves your pocket, and you pay no interest on it over the life of the loan.
  • The flip side: a 5% deposit means borrowing $665,000 instead of $560,000, which costs more interest over the loan's life. The bank's income test also still applies; see how it works in the borrowing power explainer.

The doctor perks

PerkWhat is publishedWhat it means for you
LMI waived at a small deposit Published medico policies waive LMI on loans of typically up to 95% of the property's value, sometimes up to 100% for owner-occupied property. A 5% deposit instead of 20%, with no premium. On a $700,000 purchase that is $35,000 down instead of $140,000.
Overtime counted in full Published healthcare policies assess up to 100% of overtime and allowances, and count casual income as a full year's income. More of your real income counts in the serviceability test, the bank's income test that sets your borrowing power; how much of other borrowers' overtime counts is not printed on any bank's public page.
Bargaining power Nothing numeric: banks compete for medico clients on pricing and service, and none of it is printed. Asking costs nothing, and what is printed is not necessarily the best available.

Why banks do this

Doctors rarely default, their incomes are high and stable across a whole career, and banks compete to win clients they expect to keep for decades. The waiver is the visible part of that competition; the invisible part is that pricing and service are negotiable for you in a way they are not for most borrowers.

Do all doctors get the same deal?

No: the published policies differ on who counts, and the differences run along four lines.

What differsHow the published policies varyThe question to ask
Career stage Some published policies name interns, residents and registrars explicitly; others print no career-stage rule at all. "Am I eligible at my training level?"
Registration type Some published policies require current AHPRA generalist or specialist registration, with provisional and limited registration excluded, which can rule an intern out even where career stage is never mentioned. "Does my registration type qualify?"
Specialty Printed occupation lists run from broad (dentists, GPs, hospital-employed doctors, specialists) to narrow lists of named specialties. "Is my exact role on your list?"
Income Published doctor tiers mostly carry no minimum income; some policies print no income detail at all, so a threshold can still sit in broker-held credit policy. "Does any income threshold apply to me?"

FAQ

What is lenders mortgage insurance and why do doctors get it waived?
LMI is insurance a bank takes out, at your cost, when your deposit is below about 20 per cent of the property's value; a bank's own published example puts it at over $10,000 on a $500,000 loan with a $50,000 deposit. You pay the premium but it protects the bank, not you. Banks waive it for eligible doctors because they rarely default and their incomes are high and stable, so the small deposit carries less of the risk the insurance exists for.
Can interns and registrars get a doctor home loan with no LMI?
Often, yes. Some published policies name interns, residents and registrars explicitly, while others instead require AHPRA generalist or specialist registration, which an intern's provisional registration does not meet. Check which kind of rule your lender prints before assuming either way.
How much deposit do I actually need?
Under a typical published waiver, 5 per cent of the price plus purchase costs, which the waiver does not touch: stamp duty, legal fees and inspections. On a $700,000 purchase that is $35,000 plus costs, against $140,000 the standard 20 per cent way. The loan still has to pass the bank's serviceability test, so your income, expenses and other debts decide the rest.
How do I find out whether a waiver applies to me?
Read the lender's current policy page or ask a broker to match your situation. The questions that decide it are your profession, your AHPRA registration type, your career stage and, sometimes, your income. Anything finer, such as postgraduate-year rules, is broker-held credit policy you can only confirm directly.
Is a doctor home loan the same as the best home loan?
No. An LMI waiver changes the deposit you need, not the interest rate you pay. A loan taken with a 5% deposit and waived LMI still carries more debt and more interest than the same purchase with a bigger deposit, so the waiver is a tool, not automatically a win.
Sources & methodology

Claims were checked against the pages linked below on 14 August 2026. General information only; not credit assistance or a recommendation, and policies change without notice.

Last updated: