Can you get a 90% LVR home loan with no lender's mortgage insurance (LMI)?
Australia’s median property price jumped 39.1% over the five years to March 2025, reaching a record-high $820,331, according to Cotality, leaving many people to wonder whether they could ever save a 20% deposit to buy a home of their own.
Thankfully, it’s possible to qualify for a home loan with just a 10% deposit – and even avoid paying lender’s mortgage insurance (LMI) in the process. This article explains how.
What is LVR?
LVR, or loan-to-value ratio, is the percentage of the property’s value that you borrow from a lender.
For example, if you were buying a $700,000 home and had a $70,000 deposit, that means you’d be borrowing $630,000 or 90% of the property’s value. As a result, your LVR would be 90%.
The higher your LVR, the more risk you pose to the lender. That’s why most lenders charge LMI when your LVR is above 80%.
What is LMI?
LMI is an insurance policy that protects the lender – not the borrower – if you can’t repay your loan. It’s a one-off premium that can add thousands or even tens of thousands of dollars to your total loan cost.
If you'd like a deeper understanding of LMI, check out this article: LMI: What it is and how it works.
Can you get a 90% LVR home loan in Australia?
Yes, many lenders in Australia offer home loans to borrowers with a 90% LVR; some even go up to 95%.
However, if your LVR is above 80%, you’d usually be required to pay LMI – unless you qualify for an exemption.
Who is eligible for no LMI on their home loan?
Some lenders offer LMI waivers to certain borrowers, including:
- Medical professionals (e.g. doctors, dentists and pharmacists)
- Lawyers
- Accountants
- Engineers
- Certain professionals with high, stable incomes
Eligibility varies from lender to lender. In most cases, you’ll also need a good credit score and strong financials to qualify. Some lenders may also require you to buy an owner-occupied home rather than an investment property.
Federal government schemes, such as the First Home Guarantee, may also let you buy with a 5% deposit without paying LMI, although eligibility criteria apply.
What to consider when taking out a loan with less than a 20% deposit
While it’s possible to buy a home with a smaller deposit, there are a few things to keep in mind:
- You may face higher interest rates – Some lenders charge more when the LVR is above 80%.
- Your borrowing power might be lower – A smaller deposit could limit the amount you’re approved to borrow.
- You’ll start with less equity in your home – That means it could take longer to build meaningful equity or refinance.
- You may still need to pay LMI – Unless you’re eligible for an exemption, your lender may charge you LMI: this could be paid upfront or added to your loan.
Buying with a smaller deposit is possible – and for some, it will be the right choice. But it’s important to understand the costs and risks involved, which is why it won’t be the right choice for everyone.
Talk with a broker to see if you qualify for a no-LMI home loan and whether it’s suitable for your scenario.