The cost of the LMI ranges from 1% to 3% of the loan amount, and the premium increases as the leverage of the property increases. The LMI is a one-time cost and not a recurring premium. LMI exemptions were originally introduced for medical professionals, and were later expanded to include other professions, such as the legal profession, accountants, professional athletes, entertainment industry professionals, and mining specialists. Since banking deregulation was introduced in the 1970s, higher LVR loans became possible, allowing many people to take advantage of buying a property, as the requirement for a 20% deposit was no longer considered an obstacle.
Do many lenders still offer LMI exemptions for accountants, etc.? Some lenders even prefer certain roles within the medical profession, such as anesthetists and obstetricians. First-time homebuyers can also apply for the First Home Deposit Plan (FHLDS), which provides eligible borrowers with a special government guarantee that exempts from LMI fees for a deposit of as little as 5%. As a resident in 26% medical practices, borrow up to 90% of the price of the property and don't pay any LMI for your mortgage loan. As a medical professional, you can take advantage of LMI and LVR exemptions of up to 95% with CBA doctor home loans.
This amount may be greater than the actual cost of the LMI, but if you've already been saving and are close to the target amount, this cost shouldn't be a cause for concern. The first step to obtaining a low premium is to understand how the LMI premium is calculated and then to determine if there is anything you can do to qualify for a cheaper premium. Some lenders offer special offers in an attempt to gain additional market share and, in many cases, these LMI special offers are not announced to the public. If you are a professional athlete, you must have an accredited agent or manager to be eligible for the LMI exemption.
Doctors, dentists and lawyers, for example, are considered low-risk borrowers and may even be eligible for an LMI exemption. Mortgage loans for physical therapists include exclusive interest rate discounts and an LMI exemption is offered. If you have a large deposit and are in good financial position, you may be eligible for an 85% non-LMI mortgage loan. Mortgage loans for mine surveyors do not include an LMI and interest rate discounts are not available to the general public.
