LMI Waiver for Teachers

If you are a teacher buying a home with less than a 20% deposit, you will normally be charged Lenders Mortgage Insurance. LMI protects the lender if you default on your loan. It does not protect you at all, even though you are the one paying for it.

On a $700,000 property with a 10% deposit, LMI can cost between $17,000 and $18,000. That is a significant amount of money added to your loan or paid upfront at settlement, and it does nothing for you personally.

The good news is that certain lenders recognise teachers as stable, reliable borrowers and offer to cover or remove this cost. This is known as a teacher LMI waiver, and it can save you tens of thousands of dollars when buying a home. The challenge is that very few lenders offer it, and the eligibility rules are specific, so most teachers never find out it exists.

Only Two Lenders Offer This for Teachers

This is the part that surprises most people. The major banks, including ANZ, NAB, Westpac, and St George, do not offer LMI waivers for teachers. Their LMI waiver programs cover medical professionals, accountants, and lawyers, but teachers are not included at any of them.

Westpac and St George do have specific policies for assessing casual teacher income, but these relate to how they calculate your earnings, not whether you pay LMI. Teachers still pay LMI at these lenders if borrowing above 80% of the property value.

As at 2026, the two lenders offering teacher-specific LMI waivers are Bank First and Granite Home Loans. Both allow eligible teachers to borrow up to 90% of the property value with no LMI. However, each lender has different rules about who qualifies, so it is worth understanding both before you apply.

Bank First: Broad Eligibility, but First Home Buyers Only

Bank First specialises in the education and healthcare sectors and takes a broad view of who counts as an education worker. Their LMI waiver covers teachers, tutors, trainers, childcare workers, university staff, and employees of eligible educational institutions including government schools, non-government schools, Catholic schools, TAFEs, preschools, kindergartens, and childcare centres. Even students studying teaching may qualify.

That broad eligibility makes Bank First appealing, but there are conditions to be aware of. Their education sector LMI waiver is available to first home buyers only. The property must be owner-occupied. Off-the-plan and construction loans are excluded, and equity release is not available on refinanced loans. Loans above 80% LVR also carry a higher interest rate.

If you are a first home buyer working anywhere in the education sector, Bank First is worth exploring. If you already own property, their program will not apply to you.

Granite Home Loans: Open to Repeat Buyers, but Stricter Conditions

Granite Home Loans takes a different approach. Under their Lender Paid LMI program, Granite actually pays the LMI premium on your behalf rather than simply removing it. Teachers fall under Granite's Essential Worker category, alongside police officers, firefighters, paramedics, and registered nurses.

Granite's program is not restricted to first home buyers, which makes it particularly useful for teachers who already own a home and want to purchase again without paying LMI. However, the eligibility criteria are more specific than Bank First's.

To qualify as an Essential Worker at Granite, you must be a primary or secondary school teacher at a government or public school. You must be permanent full-time and off probation. The property must be in a metro or inner-city location, and it must be an owner-occupied purchase of an established or new dwelling. No construction or vacant land is permitted. You will need a minimum of $5,000 in genuine savings, and Granite conducts a Financial Habits Assessment as part of your application, looking at how you manage HECS repayments, rent, and other commitments. Only one borrower on the loan needs to meet the Essential Worker criteria.

Teachers at private or independent schools, those on casual or fixed-term contracts, or those buying in regional areas will not meet Granite's Essential Worker criteria. However, Granite does offer a separate product at 85% LVR with no LMI that is open to any profession and covers both owner-occupied and investment properties. A broker can help you work out whether this alternative fits your situation.

How Much Can You Save?

The savings depend on the property price and your deposit size. With a 10% deposit, here is what eligible teachers can expect to save:

• $500,000 property: approximately $10,000 in LMI

• $700,000 property: approximately $17,000 to $18,000 in LMI

• $900,000 property: $25,000 or more in LMI

These are real dollar savings that go straight back toward your home rather than covering an insurance premium that only protects the lender.

How Does the LMI Waiver Compare to the First Home Guarantee?

If you are a first home buyer, the First Home Guarantee is another way to avoid paying LMI. It is available to any profession, requires only a 5% deposit, and has no income cap or place limits since October 2025. It is also available through a much wider range of lenders and has no geographic restrictions.

The teacher LMI waiver requires a 10% deposit and is only available through Bank First or Granite. For first home buyers, the First Home Guarantee will often be the stronger option because of the smaller deposit and broader lender access. However, some teachers may find that one of the LMI waiver lenders offers a more competitive rate or product features for their situation, so it is worth comparing both pathways with a broker.

For teachers who already own a home, the First Home Guarantee is not an option. Granite's Essential Worker product or their 85% LVR no-LMI product are the main alternatives for avoiding LMI on a subsequent purchase.

What About Casual and Contract Teachers?

Casual and relief teaching income is assessed differently from permanent salary. Lenders like Westpac and St George annualise casual teacher income over 52 weeks and may accept a single year-to-date payslip covering at least 6 months of earnings. Some lenders use only 40 weeks to account for school holidays, which reduces your assessed income and borrowing capacity.

It is important to know that casual and contract teachers do not currently qualify for the 90% LVR teacher LMI waiver at either Bank First or Granite. Granite specifically requires permanent full-time employment. Casual teachers may still avoid LMI through the First Home Guarantee (if they are first home buyers) or through Granite's 85% LVR product with a 15% deposit.

Why You Need a Broker for This

Because only two lenders offer teacher LMI waivers, and one of them (Granite) is exclusively broker-accessible, working with a mortgage broker is essential. You cannot apply to Granite directly.

The eligibility conditions between the two lenders are quite different. Bank First covers a wider range of education roles but is limited to first home buyers. Granite accepts repeat buyers but only covers permanent full-time government school teachers buying in metro areas. A broker who understands these differences can quickly identify which pathway applies to you, or whether an alternative like the First Home Guarantee or the 85% LVR product is a stronger fit.

A broker who works with teachers can also ensure your income is presented in the way that gives you the strongest borrowing position. Different lenders assess teacher income differently, and having someone who knows these details can make a real difference to how much you are approved to borrow.

Ready to Find Out If You Qualify?

Teacher Loans works with educators across Australia to access the LMI waiver and other profession-specific home loan benefits. Whether you are buying your first home, upgrading, or looking at an investment property, we can help you find lenders who recognise your profession and reward it.

Explore your home loan options as a teacher or learn more about no LMI loans for teachers to see what is available to you.

Step 1: Initial Consultation

The process starts with a conversation about your property goals. Whether you are purchasing a home, investing, refinancing, or exploring another loan type, your Finance and Mortgage Broker will explain how home loans for teachers work and begin identifying suitable options from a wide panel of banks and lenders across Australia. This is also where we assess your financial position and confirm which teacher-specific benefits you may be eligible for.

Step 2: Financial Assessment

Your broker conducts a detailed review of your income, expenses, assets, liabilities, and savings. For teachers, this includes reviewing payslips with salary sacrifice deductions, allowances, and any casual or contract income. Your broker will determine your borrowing capacity and explain key terms such as loan to value ratio (LVR), lenders mortgage insurance (LMI), and any government schemes that apply to home loans for teachers.

Step 3: Loan Comparison and Selection

With a clear picture of your financial situation, your broker researches and compares loan options suited to your needs. These may include fixed or variable interest rate products, loans with offset accounts, or options with flexible repayment features. Your broker will walk you through the pros and cons of each option so you can choose with confidence.

Step 4: Pre-Approval

Securing loan pre-approval gives you a clear idea of how much you can borrow and strengthens your position when making an offer on a property. Your broker prepares and submits the required documents, including payslips, tax returns, and bank statements, to the lender for assessment. Pre-approval is particularly valuable in a moving property market.

Step 5: Formal Application

Once you have chosen your preferred loan, your broker completes and submits the formal application to the lender. They manage all required documentation, respond to lender queries, and keep you informed throughout the process. This is where having a broker who understands home loans for teachers makes a real difference, as teacher-specific payslips and employment contracts are handled correctly from the start.

Step 6: Approval and Settlement Preparation

After your loan is formally approved, your broker reviews the loan agreement with you and confirms that all terms, including interest rate, fees, and repayment schedule, are clear. They also help you set up your loan account and arrange any necessary insurance. This step ensures there are no surprises before settlement.

Step 7: Settlement and Ongoing Support

At settlement, the lender advances the funds and ownership of the property transfers to you. Your broker coordinates with your solicitor or conveyancer to ensure everything runs smoothly. After settlement, your Finance and Mortgage Broker remains available for ongoing support, whether that means managing repayments, exploring home loan refinancing for teachers, or helping with future property plans.