Buying a home can be challenging, especially when you’re saving for a hefty 20% deposit to avoid Lenders Mortgage Insurance (LMI). If you’re an Australian police officer, there’s good news: the Police LMI waiver could help you get into your home sooner without paying LMI, potentially saving you tens of thousands of dollars. In this comprehensive guide, we’ll explain what the Police LMI waiver is, why it matters, and how you can take advantage of it by using a mortgage broker in Brisbane.
What Is LMI and Why Do Police Officers Get An LMI Waiver?
Lenders Mortgage Insurance (LMI) is a one-off insurance premium that lenders charge when you borrow more than 80% of a property’s value. In other words, if you have less than a 20% deposit, most banks will require LMI to protect the lender in case you can’t repay the loan. It’s important to note that LMI protects the lender, not you as the borrower, even though you are the one paying for it. LMI can either be paid upfront or added (capitalised) onto your loan, increasing your debt and interest costs over time.
Why do police officers get a special waiver for LMI?
Some lenders consider police officers low-risk, reliable borrowers (thanks to stable employment and the essential service you provide). As a way to thank first responders and essential workers, certain banks and credit unions waive the LMI requirement for eligible police officers borrowing with a smaller deposit. This Police LMI waiver means if you’re a qualifying police officer, you can borrow up to 90% – without needing to pay LMI. What this means is, the lender is willing to take on the risk themselves because of your profession’s perceived stability and importance.
Why does this matter? Avoiding LMI can save you a huge amount of money and help you buy a home sooner. For many buyers, LMI premiums are a huge extra cost that either delays their purchase or adds to their debt. By leveraging your role as a police officer, you could keep that money in your pocket. It’s a well-deserved perk for serving the community, and lenders are increasingly offering it to attract borrowers like you.
How Much Can You Save With A Police LMI Waiver?
The savings from an LMI waiver are nothing to sneeze at. LMI premiums can range from about 1% to 5% of the loan amount, depending on how much deposit you have. On a typical home loan, this adds up quickly. For example, on a $500,000 loan with only a 10% deposit (90% LVR), LMI might cost you roughly $14,000. This figure is even higher if you’re not a first-home buyer. On a $600,000 home at 90% LVR, the LMI could be around $22,800. These are massive amounts that you’d otherwise have to pay or add to your mortgage.
By using a Police LMI waiver, you eliminate this cost entirely. That’s money you save upfront or avoid tacking onto your loan balance. You could use this money to cover your stamp duty, moving costs, and new furniture, or it could even act as a buffer in your offset account. An LMI Waiver also lowers your loan-to-value ratio over time because you’re not increasing your loan with LMI fees. In short, the waiver helps lower the upfront cost of buying a house, making home ownership more accessible sooner.
To put it in perspective, LMI can easily cost “tens of thousands of dollars” on a typical house purchase in Australia’s bigger cities. By avoiding that expense, police officers can significantly improve their financial position as new homeowners. Many lenders themselves highlight that waiving LMI for essential workers such as the police can save borrowers thousands. This waiver is not just about saving money – it can mean the difference between buying now with a 10% deposit versus waiting years to save up 20%.
Case Study – Buying First Home on a 10% Deposit
Senior Constable Alex is an officer with the NSW Police Force, earning about $85,000 a year plus overtime. Alex is eager to stop renting and buy a home for his young family now. He has saved $60,000 for a house deposit, but that’s only 10% of a $600,000 house. Normally, with a 10% deposit, a lender would charge LMI because the LVR is 90%. On a $540,000 loan (for a $600k home), Alex could face around $22,000 in LMI premiums- a huge added cost.
However, Alex discovers that People’s Choice Credit Union offers an LMI waiver for police officers under their Essential Services Package. With the help of a mortgage broker, he applies to People’s Choice and gets approved to borrow 90% LVR with no LMI. This saves him roughly $22,000 compared to if he went with a lender that charged LMI. He uses the saved money to cover stamp duty and moving expenses. He even keeps a few thousand as an emergency fund.
What Other Benefits Are Police Eligible For?
Beyond the financial savings, some lenders include other perks for police in their home loan packages, such as:
- Interest rate discounts or fee waivers as part of professional packages for community heroes like police. These can come in the form of slightly better rates or waived application fees, depending on the lender.
- Better income recognition: Certain lenders (like Westpac) will count 100% of your overtime and allowances in their assessment if you’re frontline police. This boosts your borrowing power, acknowledging that police often earn significant overtime.
- No annual fee packages: Some institutions waive package fees for essential workers, saving you a few hundred dollars each year on home loan bundles.
- Cashback offers: At times, banks run cashback promotions (e.g. $3,000–$4,000) for refinancing or new loans. There have been special cashback deals exclusively for police and emergency services in some cases.
These extras can enhance the overall benefit of the LMI waiver. However, the core advantage remains the LMI saving, which is usually far larger than any minor discounts.
Who Is Eligible For The Police LMI Waiver?
Each lender sets its own eligibility criteria for granting an LMI waiver to police officers, but there are common requirements across the board. Here’s what you generally need to qualify:
- Employment as a Police Officer: You must be a currently employed, sworn police officer – whether at a state police service (e.g. QPS, NSW Police, Victoria Police, etc.) or the Australian Federal Police. For most lenders, sworn officers (including frontline constables, sergeants, detectives, etc. are eligible. Typically, administrative staff or unsworn employees of the police service do not qualify under these schemes (the waiver is meant for frontline personnel).In some cases, related roles like Protective Services Officers or specialist police (for instance, in Victoria) are included, but you should check with the lender.
- Minimum Deposit (Maximum LVR): You’ll still need some deposit – typically at least 10% of the property value. The waiver usually lets you borrow up to 90% LVR without LMI. This means you could be eligible if you have a 10% deposit (and funds for purchase costs like stamp duty). Some niche lenders or special programs may extend this to 95% for certain professionals, but for police, the standard cap is 90% in most cases. Remember, anything above 90% typically would still incur LMI or require a different scheme, such as the First Home Guarantee, which we discuss later.
- Income Requirements: Depending on the lender, there might be a minimum income threshold to qualify for the LMI waiver. This is more common with some banks when extending waivers to professionals. For police officer waivers, some lenders do not set a specific income floor – they simply require that you’re employed as a police officer. In joint applications, it’s enough if one applicant is an eligible police officer meeting the criteria – both parties don’t need to be in the force. Generally, if you’re a full-time officer, your income will likely satisfy most lender requirements, but check if your lender has a specific cutoff.
- Loan Purpose and Property Type: LMI waivers for police are commonly available for owner-occupier home purchases. Many lenders restrict the waiver to owner-occupied loans (not investment properties) or at least to principal-and-interest repayments. However, there are exceptions, and some lenders offer essential worker waivers on both owner-occupied and investment property loans, which is great if you’re a police officer looking to invest.
- Good Credit and Financial Standing: You’ll still need to meet standard lending criteria. The LMI waiver isn’t a free pass on having a good credit score. You must qualify for the loan itself under the bank’s normal credit policies (income, expenses, credit history, etc.). The bank will assess that you can afford the loan repayments comfortably. In short, you need to be a good borrower on paper, as the lender is taking on more risk by not insuring the loan.
- Proof of Profession: Be prepared to prove your occupation to the lender. This might involve providing a letter of employment or ID confirming your role as a police officer. Often, a copy of your work ID or a payslip with your police service employer listed will suffice. Some lenders may have specific verification requirements (your mortgage broker or lender will guide you). Since the waiver is tied to your job, they need to document that you indeed have that job. If you’re newly sworn in, you might need a confirmation of appointment.
Important: Eligibility criteria can differ between institutions. For example, some lenders extend LMI waivers to “police, emergency and health workers” for loans up to 90% LVR, and they specify it’s for certain purposes (owner-occupied) and possibly only within certain property value limits or locations. Meanwhile, others include state and federal police in their waiver program without restricting it to first-home buyers or owner-occupiers only. Always check the exact requirements of the lender you choose.
Expert tip: If you’re not sure about your eligibility, talk to a mortgage broker or the lender before you start the loan process. They can confirm whether your position (and your financial situation) meets the criteria for the LMI waiver.
Case Study 2 - Upgrading Home with Small Equity
Maria is a detective in the Queensland Police Service who bought her first apartment years ago. Now, she and her husband (who works in IT) want to upgrade to a house in Brisbane for their growing family. They have some equity from their apartment, but after selling and covering the old mortgage, they only have about 15% of the new property’s value for a deposit. They find a house for $800,000 – 15% of that is $120,000, so they would need to borrow $680,000 (85% LVR). Normally, any LVR above 80% triggers LMI. On a $680,000 loan at 85% LVR, the LMI could easily be $12,000 or more in Queensland for non-first-home buyers.
Maria remembers hearing that as a police officer, she might get a deal. She contacts her mortgage broker in Brisbane who finds them a lender willing to waiver LMI for non-first homebuyers. Only Maria is a police officer, but that’s fine – only one applicant needs to be in an eligible profession to get the waiver. They are approved for an 85% LVR loan, and no LMI is charged, saving them $12,000 in fees. With the new loan, they also take advantage of an offset account to park their savings.
Which Lenders Offer LMI Waivers For Police Officers?
Not all banks offer LMI waivers to police officers, but a growing number of lenders do. Here are some of the main institutions and what they offer for Australian police:
- People’s Choice Credit Union: Through its Essential Services Package, People’s Choice allows eligible police officers as well as registered nurses and paramedics) to borrow up to 90% LVR with no LMI payable.
- BankVic: BankVic is a member-owned bank historically serving Victoria Police and their families, and it now also serves emergency and health workers. BankVic offers LMI waivers up to 90% LVR for police officers, meaning members of BankVic who are police can buy with a 10% deposit and pay no LMI
- Mortgage Brokers / Specialised Lenders: Several mortgage brokers have access to special no-LMI deals for police through non-bank lenders or smaller banks. Using a mortgage broker might uncover more options because brokers know which lenders are offering the waiver at any given time and the nuances of each. If you go down that route, ensure the broker is experienced with professional LMI waivers.
- Other Banks and Credit Unions: A number of lenders, such as regional banks, include police in their LMI waiver policies:
Unfortunately, the major banks (CBA, Westpac, NAB, ANZ) generally do not offer police-specific LMI waivers. Their LMI waivers are mostly reserved for medical, legal, and accounting professionals. However, just because the Big 4 don’t have a police waiver doesn’t mean you can’t avoid LMI with them – you might qualify for a First Home Guarantee scheme letting you borrow 95% without LMI.
How to Apply For A Police LMI Waiver – Step By Step
Applying for a home loan with an LMI waiver when you’re a police officer isn’t too different from a normal home loan application. Here’s a step-by-step guide to smooth the process:
1. Confirm Your Eligibility: First, ensure that you meet the criteria for an LMI waiver. Are you a sworn police officer (and can you prove it)? Do you have at least a 10% deposit saved (plus extra to cover costs like stamp duty and conveyancing)? Is your credit file in good shape? Checking these basics will tell you if it’s worth pursuing a waiver. If you’re unsure, a quick chat with a mortgage broker can clarify if you fit the bill.
2. Shop Around: Next, decide on the lender or get professional help to compare. You’ll want to identify which lenders offer the best LMI waiver deal for your needs, considering interest rates, loan features, etc. Using a mortgage broker can be very handy here – brokers often know exactly which lenders offer police LMI waivers and any quirks in their policies.
3. Gather Your Documentation: Prepare the documents you’ll need for a home loan application. This includes proof of income (recent payslips, group certificate or tax return, any other income documents), ID documents, bank statements for your savings and other debts, and, importantly, proof of your occupation as a police officer. For the latter, a letter from your police force HR department or a copy of your employee ID/badge or payslip showing employer name will usually suffice.
4. Get Pre-Approval (Conditional Approval): It’s often smart to apply for a pre-approval (also called conditional approval) once you’ve picked a lender. During pre-approval, mention that you are applying under the LMI waiver for police officers. Usually, there may be a tick-box or a note stating “professional LMI waiver” in the application. By getting pre-approved, the bank will assess your capacity and check your eligibility for the waiver before you go and sign a contract on a property.
5. Find a Property and Complete the Loan Process: With your pre-approval in hand, you can house hunt within your budget. Once you sign a contract on a property, it’s time to finalise your home loan. Notify your lender/broker immediately so they can order a valuation on the property. The bank will make sure the property meets any criteria (remember, some waivers might exclude certain property types or very high-value properties).
6. Get unconditional (formal) approval. The loan contracts will then document your loan amount, interest rate, etc. – and should show that no LMI premium is charged. Double-check your loan contract or approval letter to ensure it says LMI $0 or that LMI is waived. It’s usually clearly indicated, but it never hurts to confirm.
7. Settlement and Beyond: Proceed to settlement as normal (your conveyancer and lender will handle the funds exchange on settlement day). Congratulations, you’re a homeowner!
8. After settlement, make sure you set up any offset account or redraw facilities and begin your repayments. The beauty is you won’t see an LMI charge in your loan account. Going forward, all you need to do is enjoy your new home and keep up with your mortgage. The fact that you used an LMI waiver doesn’t impose any special conditions on you later – for example, you don’t have to remain in the police force for the life of the loan. If, hypothetically, you left the police service a few years down the track, your loan doesn’t change; the bank won’t suddenly add an LMI premium after the fact. The waiver is locked in once the loan is funded.
Government Incentives For Police Officers
- First Home Owner Grant {FHOG). If you’re a first-home buyer, don’t forget to check for the First Home Owner Grant (FHOG) in your state. It is a one-off grant given to Australians who want to buy a home for the first time. You can get between $10,000 to $15,000 to buy a new build or substantially renovated property.
- Stamp duty concessions or exemptions. If you are a first homebuyer you can get a discount or get stamp duty completely waived. These can save you thousands in taxes, improving your upfront costs alongside the LMI waiver. Police officers buying their first home should leverage these if eligible – it’s essentially free money or reduced tax that can be combined with the LMI waiver for maximum benefit.
- First Home Guarantee Scheme. The federal government’s First Home Guarantee (FHBG) allows eligible first-home buyers to buy with only a 5% deposit and no LMI. The government acts as a guarantor for the additional 15% needed to make the lender comfortable.
- Family Home Guarantee. Another federal scheme, the Family Home Guarantee, lets single parents with at least one dependent buy with only a 2% deposit and no LMI.
Other Financial Considerations and Home-Buying Tips For Police Officers
Taking out a mortgage is a major financial decision, LMI waiver or not. As a Police officer, you should consider the broader context of your home purchase and finances. Here are some tips to keep in mind:
- Buy or Build? (Construction Loans): Maybe you’re considering buying land and building a home. Some lenders may extend LMI waivers to construction loans for police, but check specifics. However, Construction loans are more complex, and most lenders do not like them.
- Deciding on Loan Structure: Think about what loan features benefit you. Many police officers like to have an offset account to park extra cash (like overtime payments or second income) to reduce interest. Others might want a fixed rate for stability if they foresee life changes (though fixed loans might have limitations on offset). Also, consider if you plan to make extra repayments; if so, avoid loans with high fees for that.
- Insurance and Protection: As someone in a potentially risky profession, you might want to look at income protection or life insurance when taking on a large debt like a mortgage. LMI doesn’t protect you – it’s for the lender. So it’s on you to ensure your family or finances are secure if something unexpected happens.
- Future Moves and Refinancing: Once you’ve bought your home with an LMI waiver, you might later decide to refinance (say, if a better interest rate comes along). Generally, if your LVR is still above 80% and you refinance, the new lender would require LMI unless they also offer a waiver and you meet their criteria.
- Interest Rates and “Hidden” Costs: Some borrowers wonder if banks charge a higher interest rate when waiving LMI – essentially recouping the cost elsewhere. It’s a valid concern. The reality is that some lenders may have a slightly higher rate for loans over 80% LVR (which would apply to you using the waiver). Do the math: It might sometimes be better to pay LMI for a much lower rate, though the waiver usually wins if rates are comparable.
- Building a Buffer: Just because you can buy with a 10% deposit doesn’t mean you should drain every dollar of savings for it. It’s wise to keep a buffer for emergencies. As a police officer, you know unforeseen things can happen. Try to keep some savings aside even after your deposit and purchase costs.
- Career Progression and Income Projection: When calculating how much to borrow, consider where you are in your career. Police salaries often rise with rank and tenure, and there are plenty of opportunities for overtime, secondments, etc. You might feel comfortable stretching a bit more, knowing your income will likely grow.
- Seek Financial Advice if Needed: Lastly, don’t hesitate to get advice. Talk to your colleagues who have bought homes, and speak with a financial advisor or your accountant (if you have one). They can help with budgeting for a home purchase or understanding the long-term implications.
Frequently Asked Questions About Police LMI Waivers
In most cases, lenders expect you to be a full-time sworn officer. Part-time officers might still qualify if they meet income requirements, but this can depend on the lender's discretion. What's more important is that you are a sworn police officer (graduated from the academy and officially serving).
Generally, no – civilian staff of police departments are not included in these LMI waiver offers. The programs focus on first responders and frontline essential workers. Even though your role is crucial, banks usually have a defined list (sworn police, nurses, etc.). That said, a few lenders might consider it on a case-by-case basis if your position is with the police service.
This depends on the lender. Many lenders restrict the waiver to owner-occupied homes, meaning you intend to live in the property. If you're looking to buy an investment (or a second property) and want to use the waiver, focus on lenders that don't restrict to first homes or owner-occupied only. They do exist.
Often, yes. Lenders sometimes impose a cap on how much you can borrow or the property value when using an LMI waiver. For instance, some banks might say "up to $1 million" or have an internal cap, but beyond that, they won't waive LMI even if you're in the profession.
Usually through employment documentation such as A letter of employment from your police department's HR, Your payslips or a copy of your staff ID or badge
Unfortunately, past LMI premiums are not refundable (except sometimes a tiny pro-rated refund if you paid it very recently and refinance, but that's limited). LMI is generally a non-refundable, one-off fee.
Not directly. Your borrowing capacity (serviceability) is calculated based on income, expenses, and debts. Being a police officer might indirectly help capacity if the lender counts more of your overtime or allowances, but the waiver itself doesn't change the math – it just removes a cost.
Technically, if you have a guarantor, you wouldn't need the waiver because the guarantor arrangement already eliminates the need for LMI (by covering the 20% security gap). Banks wouldn't "double up" these benefits – they'd choose one method of mitigating risk. If you have a guarantor who is willing to support you, you can borrow up to 100% without LMI through a guarantor loan. There'd be no point in an LMI waiver in that case.
Often, no, interest-only repayment loans at high LVR are excluded from special treatment. Lenders usually want you to pay down the principal if they're giving a concession like no LMI.
It depends on the lender and economic conditions. Right now, there is a trend of lenders expanding LMI waivers to more professions. For example, we've seen nurses added recently. As long as banks find value in lending to police officers, the programs should stay.
Not true. Not all lenders waive LMI for police – only specific ones do. You either need to go with a lender that offers the waiver to police or qualify for a separate scheme.
The waivers we're discussing are offered by lenders privately, not by the government (unlike the First Home Guarantee, which is government-backed). Banks and credit unions choose to waive LMI for certain professions because those borrowers are seen as lower risk or to attract a certain clientele.
The profession-based LMI waivers usually require a minimum of 10% deposit (90% LVR). With only 5%, your LVR is 95% – most lenders will not waive LMI at that level for police. The only way to borrow 95% without LMI is via the First Home Guarantee.
While it's true you might end up with a slightly higher interest rate because you have a high LVR loan, it's usually the same rate any customer with that deposit would get. The bank isn't explicitly adding a surcharge because you're not paying LMI. However, it is good to be cautious: always compare the overall deal.
LMI waiver has no impact on your obligation to repay or the consequences if you don't. It simply means the lender didn't take insurance. If anything, the bank might be a bit more stringent with you because they have no insurance safety net. You should absolutely still have a solid plan to meet your mortgage repayments. If you default, the lender can still foreclose
Not necessarily. Unlike some schemes that are only for first-home buyers, many professional LMI waivers are open to both first-home and subsequent purchases.
The waiver is based on your status at the time of loan approval. Once the loan is settled with no LMI, you're not going to be charged LMI if you change jobs, retire, or otherwise. The bank can't and won't add an insurance premium after the fact.
Not exactly. Both an LMI waiver and a guarantor can result in you not paying LMI with a low deposit, but they're different mechanisms. A guarantor (often a parent or family member) puts up equity in their property to secure your loan, so the bank is protected by that extra collateral. With an LMI waiver, there is no extra security – the bank is just trusting your profile (profession/income) and perhaps absorbing the risk.
Conclusion
The Police LMI waiver is a powerful benefit that can help Australian police officers achieve home ownership sooner and with less cost. By leveraging the respect and trust that lenders have in your profession, you can save thousands of dollars on Lenders Mortgage Insurance and turn a 10% deposit into a reality of owning a home. In summary, here are the key takeaways:
- LMI waivers for police allow you to avoid paying LMI with as little as 10% deposit – a perk that can save you a significant amount of money. Several lenders actively offer these waivers to police officers. It pays to shop around or use a broker to find the best deal for you.
- You must be a sworn police officer and meet the lender’s criteria (deposit, income, etc.) to qualify.
- The process of getting a home loan with an LMI waiver isn’t much different from a normal loan – just make sure to highlight your occupation and choose an accommodating lender.
- Combine the LMI waiver with other benefits like first-home grants or government guarantee schemes, if possible, and always keep an eye on your overall financial plan.
Remember: Each person’s situation is unique. While we’ve provided a comprehensive overview, consider getting personalised advice from a mortgage broker or financial advisor. They can take into account your specific circumstances (location, income, family needs, etc.) and guide you to the best outcome – often at no direct cost to you.
Next Steps And Getting Your Home Loan
Are you ready to take the next step towards buying?
Our team at Hunter Galloway is here to help you buy a home in Australia. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
Start again
