Do you know what income unlocks no LMI loans?

What income do you need to avoid LMI as a high school teacher?

Most lenders offering no LMI loans to teachers set their minimum income threshold between $90,000 and $100,000 per annum. Some lenders will consider your base salary only, while others include regular allowances like coordination payments or permanent extra-curricular duties.

The threshold exists because lenders use it as a proxy for job stability and repayment capacity. They assume that teachers earning above this level have progressed beyond graduate positions and are less likely to leave the profession. The income requirement also helps offset the risk the lender takes by not charging you LMI on a high loan to value ratio.

Not every lender uses the same threshold, and not all of them assess income the same way. One lender might accept $95,000 in base salary, while another requires $100,000 but will include a $4,000 coordination allowance to get you there. The difference matters when you are sitting just below the cut-off.

How lenders assess your income for professional no LMI loans

Lenders calculate your income using your most recent payslip and either your contract or a letter from your employer. They look at your base salary first, then decide whether to include allowances.

Allowances that appear on every payslip and are written into your contract usually count. A coordination role that pays an extra $5,000 per year will generally be included if it is ongoing and documented. One-off payments like relief teaching, casual loading, or performance bonuses are typically excluded because they are not considered stable income.

Consider a high school teacher earning $92,000 base salary with a $6,000 annual allowance for leading a faculty. If the lender requires $100,000 and accepts ongoing allowances, that teacher qualifies. If the lender only counts base salary, they do not. This is where a mortgage broker for teachers earns their keep, because they know which lenders will include which payments before you waste time on an application.

Does your deposit size change the income threshold?

Some lenders adjust their income requirement based on how much deposit you have. Borrowing at 90% LVR with a 10% deposit might require $90,000 in income, while borrowing at 95% LVR with a 5% deposit could push the threshold to $100,000 or higher.

The logic is straightforward. A smaller deposit means higher risk for the lender, so they tighten their criteria elsewhere. If you are close to the income cut-off and can scrape together another 5% deposit, you might meet the lower threshold and still avoid LMI.

We regularly see teachers who assume they need to save a full 20% deposit to avoid LMI altogether, when in reality a 10% deposit and proof of $95,000 income gets them the same outcome. That is the difference between waiting another two years to buy and moving forward now. If you are weighing up whether to keep saving or apply sooner, understanding how your deposit size affects the income requirement changes the calculation entirely.

Which allowances actually count toward the threshold?

Coordination payments, head teacher allowances, and permanent additional duties that are written into your contract and paid every pay cycle will usually count. Relief payments, casual shifts, tutoring income, and performance bonuses will not.

The lender wants to see that the income is ongoing and contractually guaranteed. If your payslip shows a $3,000 allowance but your contract does not mention it, expect the lender to exclude it. If the allowance is described as temporary or subject to annual review, some lenders will not count it even if it has been paid for years.

In our experience, the cleanest applications are the ones where the teacher provides a current contract, a recent payslip, and a letter from their principal or HR department confirming any additional payments. That removes ambiguity before the lender starts asking questions. You can read more about how lenders assess teacher income in our guide to home loans for teachers.

What happens if you are $2,000 under the threshold?

If you earn $98,000 and the lender requires $100,000, you have three options. You can wait until your next pay increment pushes you over the line, you can ask your employer for a letter confirming an upcoming salary increase, or you can apply with a lender that has a lower threshold.

Some lenders will accept a signed contract showing a salary increase that takes effect within 60 days. If you are due to move up the pay scale in term two and you are applying in term one, that might be enough. Other lenders will not budge and want to see the higher income already being paid.

The third option is usually the fastest. If one lender wants $100,000 and another wants $95,000, you go to the second lender. The interest rate might be slightly different, but the difference is often marginal compared to the LMI you avoid. This is where understanding LMI waivers for teachers across multiple lenders becomes important, because the threshold is not the only variable that changes.

Can casual or contract teachers access no LMI loans?

Most no LMI products require permanent employment, which rules out casual and fixed-term contract teachers. A small number of lenders will consider contract teachers if the contract has been renewed multiple times and there is a strong likelihood of ongoing employment, but those lenders usually still require the income threshold to be met.

Casual teachers are almost always excluded, even if their annualised income exceeds the threshold. Lenders treat casual income as unstable, and the professional exemption is designed around permanent roles. If you are currently casual but expect to secure a permanent position soon, it makes sense to wait until that contract is signed before applying.

The exception is if you use a family guarantee or qualify for the Home Guarantee Scheme, both of which have different income and employment requirements. Those options are covered in detail elsewhere, but they are worth exploring if you are still building tenure in a permanent role.

How the income threshold interacts with your borrowing capacity

Meeting the income threshold gets you access to the no LMI product, but it does not automatically mean you can borrow enough to buy the property you want. Your borrowing capacity is calculated separately and depends on your income, expenses, and any other debts.

A teacher earning $95,000 with no dependants and minimal expenses might be able to borrow $650,000 to $700,000 depending on interest rates and the lender's assessment method. A teacher earning the same amount with two children and a car loan might only be able to borrow $500,000. The income threshold opens the door to the no LMI loan, but your borrowing capacity determines how much you can actually access.

This is why it is worth getting loan pre-approval before you start looking at properties. You will know whether your income is high enough to qualify for the waiver and whether the amount you can borrow lines up with what you want to buy. If there is a gap, you can adjust your deposit, reduce expenses, or reconsider your budget before you fall in love with a property you cannot finance.

Call one of our team or book an appointment at a time that works for you. We will check your income against the current thresholds, work out which lenders you qualify with, and make sure you are not leaving anything on the table.

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