No LMI Loans: Income Thresholds to Skip Insurance Costs

Some lenders waive LMI if you earn above a set threshold and work in certain professions.

The income figure varies by lender and profession. Most banks set the threshold between $90,000 and $150,000 for educators, depending on whether they include base salary only or total income. If you earn less than the lender's minimum, you either pay LMI or look for a different product.

Which Lenders Set Income Thresholds for No LMI

Most major banks offer LMI waivers for teachers based on income and profession, but the threshold changes across lenders. One bank might waive LMI at $90,000 for primary teachers, while another requires $120,000 for the same role. Some lenders include your total salary package, which covers base pay plus allowances. Others only count base salary, which can push you below the threshold even if your total earnings are higher.

We regularly see educators who qualify with one lender but miss the cut with another by a few thousand dollars. The difference can cost you $15,000 to $30,000 in LMI depending on your loan amount and deposit size.

How Total Salary Package Affects the Threshold

Total salary package includes your base pay, superannuation contributions paid by your employer, and any salary-packaged benefits like novated leases or electronic devices. If a lender counts total package and your base is $95,000 but your package is $105,000, you might clear a $100,000 threshold that would otherwise exclude you.

Some lenders only recognise base salary, which means your $105,000 package drops to $95,000 for assessment purposes. That $10,000 difference can be the gap between waived LMI and paying it in full.

Consider an educator earning $98,000 base with a $108,000 total package. One lender requires $100,000 total package and waives LMI at 90% LVR. Another requires $110,000 base salary. The first lender approves the waiver. The second adds $18,000 in LMI to the loan. Both are offering home loans for teachers, but the structure of the income requirement changes the outcome.

What Happens If You Fall Just Below the Threshold

If you earn $5,000 or $10,000 below the minimum, you have a few options. You can add a smaller deposit to bring your LVR down to a level where LMI costs less, though this only reduces the cost rather than removing it. You can wait until your next pay rise if you're on a progression scale and apply once your income crosses the threshold. Or you can apply with a lender that counts total package if your current assessment only uses base salary.

Some lenders also accept a signed letter from your employer confirming an upcoming pay increase, particularly if you're moving between pay grades within the next few months. Not all lenders allow this, but it's worth asking if you're close.

Income Thresholds for Different Education Roles

Primary teachers, high school teachers, and principals often face different thresholds depending on how the lender categorises roles. Some lenders group all teachers together and apply a single threshold. Others separate classroom teachers from leadership roles and set a lower requirement for principals or heads of department.

Teaching assistants and early childhood educators typically need to meet the same income threshold as classroom teachers, but fewer lenders extend the waiver to these roles. If your role isn't listed as eligible, the income level becomes irrelevant because the waiver won't apply regardless of what you earn.

How Income Thresholds Compare to Other No LMI Options

Doctors and medical professionals often qualify for LMI waivers at higher LVRs and sometimes without an income threshold at all. Lawyers and accountants usually face similar thresholds to educators, ranging from $100,000 to $150,000 depending on the lender. The rationale is the same across professions: lenders view stable employment and regulated income progression as lower risk.

If you don't meet the income threshold for a professional waiver, you might still qualify through the Home Guarantee Scheme, which lets eligible first home buyers purchase with a 5% deposit and no LMI. The scheme doesn't have an income threshold in the same way, but it does apply a purchase price cap that varies by location.

How a Mortgage Broker for Teachers Matches You to the Right Lender

A broker compares income thresholds across lenders before you apply. If your base salary is $92,000 but your total package is $102,000, they'll direct you to the lender that counts package rather than the one that doesn't. If you're $8,000 below the threshold and six months away from a pay increase, they'll tell you whether waiting makes sense or whether another structure works now.

Most educators don't know which lenders accept total package, which ones require base only, and which ones treat different teaching roles differently. Working that out yourself means calling multiple banks and explaining your payslip structure repeatedly. A broker handles that step and tells you which lender gives you the waiver without the guesswork.

Call one of our team or book an appointment at a time that works for you.

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