The short version
- Many lenders waive lenders mortgage insurance for lawyers, usually up to 90% of the property's value.
- You'll usually need a practising certificate; judges and magistrates qualify without one.
- Some lenders set a minimum income, often $120,000 to $150,000 a year.
Lawyers, barristers, solicitors, and other legal professionals may qualify with some lenders for a home loan or investment loan of up to 90% of property value without having to take out Lenders Mortgage Insurance (LMI). You may also be able to borrow more on owner occupied and investment properties.
Other privileges can include flexible credit criteria and interest rate discounts not available to the average borrower. Legal professionals may also get loans through a company or a trust. Recent graduates may qualify with some lenders, although many set a minimum income.
LMI waivers
Home loan applicants are typically asked to take LMI to qualify for a loan if they have an initial deposit less than 20% of their property value. But LMI premiums don't come cheap and can add thousands of dollars to the total cost of your loan, especially when the premium is added to the loan and you pay interest on it. LMI waivers for lawyers can save you a lot of money over the life of the loan.
LMI waivers are lender policies that change often, and the professions, deposit limits and conditions differ between lenders. Check the current policy with the lender or a mortgage broker before you rely on one.
Eligibility criteria
Apart from the usual ID and income verification, banks will run various other checks to certify your eligibility.
Qualifications
A copy of your degree and other evidence is required to show you are practicing law or working in a legal capacity at present.
Judges and Magistrates also qualify for LMI waivers and will have to meet the income requirements just like other lawyers, solicitors and barristers. They will be asked to provide evidence that their employment conditions prevent them from holding a Practicing Certificate.
Association memberships
Most lenders will ask you for proof of your membership in a professional or industry association while some lenders may not. The following professional associations are recognised while others may be considered on a case by case basis.
- Australian Corporate Lawyers Association
- Australian Insurance Law Association
- Australian Labour Law Association
- Law Council of Australia
- Law Institute of Victoria
- Law Society of NSW
- Law Society of South Australia
- Queensland Law Society
- The Australian Bar Association
- The Commercial Law Association of Australia
Lenders may ask you for a payment receipt for your annual membership, a current and valid membership card, or written confirmation from the relevant association that you are a member. Some lenders may ask to see a practicing certificate.
Income
Income criteria for LMI waivers can differ by the lender. Where a minimum applies, it has often been around $150,000 a year in NSW, the ACT, Victoria and Queensland, and around $120,000 in WA, SA, the NT and Tasmania.
You may include any incomes you earn from rental properties in this amount. The income of your spouse cannot be included unless they are also in practice as an eligible legal professional in the capacity of a lawyer, barrister or solicitor.
Lawyers that work in government may not meet the income criteria for LMI waivers purely on their employment income. However, they can qualify with other incomes such as rental income and spousal income, if the spouse is also a practicing lawyer. Regardless, they will still be eligible for interest rate discounts and other benefits given to other lawyers.
Considerations
Can LMI be waived on investment property?
As a lawyer you are considered a low-risk borrower. So some lenders extend the same LMI waivers to loans that expand your property investment portfolio.
Should you go with a professional package?
Professional packages are an option for you if you plan to borrow larger amounts, often $150,000 or more, and are interested in investment properties and other banking products and services including credit cards, bank accounts, etc.
Professional packages come with a single annual fee, often around $400, that covers the entire portfolio of services you wish to use. Before making the decision, compare this fee against the total fees you would end up paying if you were to take each of the different banking products separately.
LMI waiver for lawyers with overseas qualifications
Lawyers with an overseas qualification are required to undergo special training and obtain membership of a professional association before they can practice law in Australia. Lawyers from some countries, such as the UK and New Zealand, may need less extra training.
LMI waivers for overseas qualified lawyers may not be automatic and you may have to work with an experienced mortgage broker who can help convince lenders to waive the LMI, especially until you get professional membership.
Consider working with a mortgage broker
Mortgage brokers work with many lenders and have access to a wide range of loan products. They can help you find the most advantageous deals after comparing interest rates, closing costs, product features and payment terms.