Most lenders who waive LMI for educators require a minimum income between $90,000 and $100,000 per year, though some will accept as low as $80,000 depending on the loan amount and your deposit size.
The income threshold exists because lenders see no LMI loans as higher risk. Without insurance backing them, they want certainty you can service the loan comfortably. That means your salary needs to sit above a baseline figure, and the way you document that income matters more than you might think.
How lenders calculate your income for no LMI eligibility
Lenders assess your base salary first. If you're a permanent full-time teacher earning $95,000 per year, that figure is straightforward. But if you receive allowances, work casual relief, or take on additional roles, the calculation shifts.
Most lenders will include ongoing allowances like responsibility payments or regional loadings if they appear consistently on your payslips. Casual loading is typically included at 80% of its value because lenders account for the fact that relief work can be irregular. Tutoring income or work outside your main teaching role may be included if you can show it over two consecutive financial years.
Consider an educator earning $88,000 in base salary with $8,000 in casual relief income across the year. A lender might assess that as $88,000 plus $6,400, bringing the total to $94,400. That sits below some thresholds but above others, which is why lender selection becomes critical.
What happens if you're just below the threshold
If your income sits at $85,000 and the lender requires $90,000, you have three options. You can apply with a co-borrower whose income lifts the combined total above the threshold. You can increase your deposit to lower the loan to value ratio, which some lenders treat more flexibly when income is borderline. Or you can wait until your next pay increase and reapply once your salary crosses the line.
Some lenders are more flexible with thresholds for educators in regional areas or those working in specialist roles. If you're a principal or head of department, your income is usually well above the minimum, but if you're early career or part-time, positioning matters.
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Part-time and contract teachers: how income is treated differently
Part-time teachers can access no LMI loans for teachers if their annualised income meets the lender's threshold. If you work 0.8 and earn $76,000, lenders won't annualise that to full-time equivalent. They assess what you actually earn.
Contract teachers on fixed-term agreements are treated as permanent if the contract has at least six months remaining and you've been in continuous teaching employment for two years or more. If you've moved between schools but stayed in the profession, that continuity usually counts. Lenders want to see stability, not necessarily the same employer.
In a scenario where a teacher has worked three consecutive one-year contracts across different schools, most lenders will assess that income as ongoing. The key document is your current contract and a letter from your employer confirming the role. If your contract is due to expire in three months, you'll need to wait until it's renewed before applying.
How overtime, allowances, and additional income affect your application
Base salary carries the most weight, but lenders will include other income types if they meet certain conditions. Allowances that appear on every payslip for at least three months are usually accepted at full value. One-off payments like back pay or leave loading are excluded.
If you run a tutoring business or work a second job, lenders typically want two years of tax returns showing that income. They'll average the two years and apply a loading reduction if the income fluctuates. A teacher earning $90,000 in their main role and $12,000 per year tutoring would have a total assessed income of around $100,000 to $101,000, depending on how consistent the tutoring income has been.
Some lenders are more conservative and won't include secondary income at all for professional no LMI applications. Others will include it but reduce the loan amount they're willing to approve. The difference can be significant when you're trying to borrow at 90% or 95% LVR without paying insurance.
Why your payslips matter more than your contract
Lenders verify income using payslips, not contracts. If your contract states $95,000 but your payslips show deductions for unpaid leave or salary sacrifice arrangements, the assessed income will be lower. Salary sacrificing into super reduces your taxable income but also reduces what lenders can use for serviceability.
If you're salary sacrificing $10,000 per year, a lender assessing $95,000 will actually see around $85,000 in net income. Some lenders add the sacrificed amount back, but others don't. That difference can push you below the threshold for waived LMI, even though your total package hasn't changed.
The other detail that catches people out is timing. If you've just received a pay increase, make sure it's reflected on at least one payslip before applying. Lenders won't accept a new contract alone as proof of higher income until it shows up in your actual pay.
Can you combine income with a partner to meet the threshold
Yes. If you're applying jointly, lenders add both incomes together. A teacher earning $85,000 and a partner earning $70,000 gives a combined income of $155,000, which clears any threshold comfortably.
Both applicants need to be on the loan and the property title. You can't use someone else's income to qualify unless they're a co-borrower. If your partner isn't an educator, they won't receive the same interest rate discounts on their portion of the loan, but the LMI waiver applies to the full loan amount as long as one borrower is an eligible professional.
The combined income approach works well for early career teachers or those returning from parental leave. It also opens up higher loan amounts, which matters if you're buying in a city where property values sit above $700,000.
How income requirements differ between lenders
Not all lenders set the same threshold. One lender might require $100,000 for a 90% LVR loan with no LMI, while another accepts $80,000 for the same loan structure. Some lenders adjust the threshold based on loan amount, so borrowing $600,000 might require $90,000 in income, but borrowing $450,000 might only require $80,000.
Lender choice matters more than most people realise. If you're earning $88,000, applying to a lender with a $100,000 threshold wastes time. Applying to one with a $80,000 threshold gets you across the line. That's where working with a broker who knows which lenders accept which income levels makes a tangible difference.
Some lenders also treat income more generously. If you're a casual relief teacher earning $92,000 but only 70% of that is base salary, one lender might assess your full income while another discounts the casual component and leaves you short. The documentation you provide and how it's presented changes the outcome.
What if your income is seasonal or irregular
Teachers working in vacation care, intensive tutoring programs, or term-based contracts sometimes have income that varies by season. Lenders will average your income over 12 months using payslips, but they'll also look for consistency. If your income drops to zero for six weeks every summer, that raises questions about serviceability.
The solution is to provide evidence that the pattern repeats each year and that you budget around it. A letter from your employer confirming ongoing engagement and a bank statement showing savings during high-income months can address lender concerns. Some lenders are more experienced with teachers and understand how term cycles work. Others treat any gap in pay as a red flag.
If you've been in the profession for three years and your income pattern is stable, most lenders will accept it. If you've only been teaching for 12 months, you may need to wait until you have a longer track record before applying for a low deposit loan without LMI.
Documentation you'll need to prove your income
Lenders require your two most recent payslips, your employment contract, and either a letter of employment or a phone call to your HR department to confirm your role. If you're including additional income, you'll need two years of tax returns and Notices of Assessment from the ATO.
Some lenders also ask for group certificates or payment summaries if you've changed jobs in the past 12 months. If you've been on parental leave or taken unpaid leave, you may need a letter explaining the gap and confirming your return to full duties.
The more proactive you are with documentation, the faster the application moves. Missing payslips or outdated contracts slow things down and sometimes result in a lender reassessing your income downward if they can't verify what you've stated.
Call one of our team or book an appointment at a time that works for you. We'll review your income, confirm which lenders will accept your application, and make sure you're positioned to access waived LMI without paying for insurance you don't need.
Frequently Asked Questions
What is the minimum income required for no LMI loans for teachers?
Most lenders require between $90,000 and $100,000 per year, though some will accept as low as $80,000 depending on the loan amount and deposit size. The threshold varies between lenders, so choosing the right one matters if your income sits near the lower end.
Do lenders include casual relief teaching income for no LMI applications?
Yes, but most lenders assess casual income at around 80% of its stated value to account for irregularity. If casual loading appears consistently on your payslips, it's usually included in your total assessed income for eligibility.
Can part-time teachers qualify for waived LMI?
Part-time teachers can qualify if their actual income meets the lender's threshold. Lenders assess what you earn, not a full-time equivalent, so a 0.8 position earning $76,000 would be assessed at that amount.
Does salary sacrificing affect my eligibility for no LMI loans?
Yes. Salary sacrificing reduces your taxable income and can lower what lenders assess for serviceability. Some lenders add the sacrificed amount back, but others don't, which can push you below the income threshold for waived LMI.
Can I combine my income with a partner to meet the no LMI threshold?
Yes. If you're applying jointly, lenders add both incomes together to assess eligibility. Both applicants must be on the loan and the property title, and the LMI waiver applies to the full loan amount if one borrower is an eligible professional.
