Lenders Mortgage Insurance (LMI) is a significant cost for many borrowers with less than a 20% deposit, but what if you could avoid paying it altogether? For eligible buyers, LMI exemptions or waivers can save tens of thousands of dollars, making homeownership or investment far more affordable. In this guide, we’ll explore what LMI exemptions are, who qualifies, and how to maximize your chances of benefiting from them. What is an LMI exemption? An LMI exemption (or waiver) allows borrowers to bypass the cost of LMI, even if they’re borrowing more than 80% of a property’s value. These exemptions are typically offered to certain professions, specific loan types, or under government-backed programs. Unlike LMI, which adds thousands to your upfront costs or loan balance, exemptions let you avoid these costs entirely. Who qualifies for an LMI exemption? There are several pathways to qualify for an LMI exemption or waiver: 1. Profession-based LMI waivers Some lenders offer LMI waivers for professionals in low-risk, high-income fields. This is because these borrowers are perceived as more financially stable and less likely to default on their loans. Eligible professions typically include: The following is a list of professions that often qualify for LMI exemptions based on their financial stability and low risk profile. Doctors and medical specialists (e.g., GPs, surgeons, dentists) are among the most common beneficiaries of profession-based waivers. If you’re in the medical field, you can explore targeted benefits through specific programs. Learn more: LMI waiver for medical professionals Accountants and actuaries are also frequently eligible for LMI waivers due to their perceived financial stability. Lawyers and barristers Engineers Key criteria for profession-based waivers: Borrowing up to 90% of the property value Proof of current employment in the profession Registration with a professional body (e.g., the AMA for doctors) 2. First-home buyer LMI waivers The First Home Guarantee (part of the Home Guarantee Scheme) offers an effective LMI exemption for eligible first-home buyers. Under this scheme, the federal government guarantees up to 15% of the loan, allowing buyers to purchase with as little as 5% deposit and no LMI. Eligibility criteria include: Must be a first-home buyer Property must meet regional price caps Income limits apply: $125,000 for singles and $200,000 for couples Example: On a $600,000 property, a 5% deposit ($30,000) under the First Home Guarantee eliminates the need for LMI, saving up to $15,000. Also Read: Understanding the first-home buyers grant for WA 3. High-income borrowers Some lenders offer LMI waivers to borrowers with exceptionally high incomes, even if they don’t work in an eligible profession. This is usually available for loans up to 85% LVR. Income thresholds vary by lender but often require annual earnings above $150,000 or more. 4. Shared equity and government-backed schemes Government programs like shared equity schemes or state-specific initiatives such as WA’s Keystart loans provide pathways to homeownership without requiring LMI. How it works: In a shared equity arrangement, the government or a private entity co-owns a portion of the property, reducing the loan size and avoiding LMI. Example: In WA, Keystart loans require as little as a 2% deposit without LMI. How to maximize your chances of qualifying for an LMI exemption To improve your chances of securing an LMI waiver, follow these tips: Work with a mortgage broker: Brokers can identify lenders offering profession-based waivers or other LMI exemption programs tailored to your situation. Provide accurate documentation: Ensure your employment records, income statements, and professional registrations are up to date. Understand lender policies: Each lender has unique eligibility criteria for LMI exemptions. Working with a broker ensures you’re matched with the right lender. Explore government schemes: If you’re a first-home buyer, research options like the First Home Guarantee to reduce your upfront costs. The benefits of LMI exemptions By qualifying for an LMI waiver, you can enjoy: Significant cost savings: Avoid paying thousands in LMI premiums. Lower loan balances: Keeping LMI out of your loan reduces the total amount you repay. Faster entry to the market: With exemptions, you can buy with less than a 20% deposit without incurring additional costs. How a mortgage broker can help you secure an LMI exemption Navigating LMI exemptions can be complex, but a mortgage broker can simplify the process. Here’s how: Tailored advice: Brokers assess your eligibility for profession-based waivers, first-home buyer schemes, and other exemptions. Streamlined process: Brokers handle the paperwork, ensuring you meet all criteria for LMI waivers and cost-saving programs. Take the first step today. Reach out to us for personalized advice on how you can leverage LMI exemptions to your benefit and save more!
What is Lenders Mortgage Insurance (LMI)?
For many Australians, buying a home is one of the most significant financial steps they’ll ever take. But if you don’t have a 20% deposit saved, you might encounter something called Lenders Mortgage Insurance (LMI). So, what is LMI, and how does it work? Let’s break it down to give you a clear understanding. What is Lenders Mortgage Insurance? Lenders Mortgage Insurance (LMI) is a type of insurance that protects the lender (not you, the borrower) if you default on your home loan. It’s required when your loan-to-value ratio (LVR) exceeds 80%, meaning you’re borrowing more than 80% of the property’s value. LMI helps lenders mitigate the risk of lending to borrowers with smaller deposits, making it possible for more people to enter the property market. How does Lenders Mortgage Insurance work? Here’s how it works in practice: Who pays for LMI? While LMI protects the lender, the borrower pays for it upfront or includes it in their loan repayments. How is LMI calculated? The cost of LMI depends on: The size of your loan The LVR (how much deposit you have) The lender’s specific rates For example: On a $500,000 property with a 10% deposit, the LMI premium could range from $5,000 to $15,000, depending on the lender and insurer. One-off cost or added to your loan? You can choose to pay LMI as a one-off expense or capitalize it (add it to your loan). Keep in mind that capitalizing increases your loan balance and the interest you’ll pay over time. Why is LMI important? LMI enables lenders to approve loans for borrowers who don’t meet the 20% deposit threshold. It has opened doors for many Australians who might otherwise struggle to save a large deposit, especially first-home buyers. Benefits of LMI: Get into the market sooner: You can buy a home with as little as a 5% deposit. Build equity faster: Entering the market earlier means you can start building equity sooner. Broader access to loans: Lenders are more willing to approve high-LVR loans thanks to LMI. Is LMI tax deductible? For most homeowners, LMI is not tax-deductible. However, if you’re buying an investment property, you may be able to claim the LMI cost as a deduction over a five-year period. So, be sure to consult with a tax professional to determine whether this applies to your situation. How does LMI compare to other costs? LMI is one of many upfront costs associated with buying a property. Here’s how it stacks up: Deposit: A 10% deposit on a $500,000 property is $50,000. Stamp duty: This depends on your state but can range from $10,000 to $20,000 (with concessions for first-home buyers). LMI premium: Adding $5,000–$15,000 to your costs, depending on your deposit size. Understanding these costs can help you plan your finances more effectively and make informed decisions. Also Read: How to avoid LMI Tips to manage or reduce LMI costs If you’re likely to pay LMI, here are some ways to manage or minimize it: Save a larger deposit: Increasing your deposit even slightly can lower your LMI premium. Use a guarantor: A family member can secure part of your loan to eliminate the need for LMI. Check for government schemes: Programs like the First Home Guarantee allow eligible buyers to purchase with a 5% deposit and no LMI. Shop around: Different lenders and insurers offer varying LMI rates. Also read: How to take advantage of LMI exemptions Common questions about LMI Q: Can LMI be avoided? A: Yes. Borrowers with a 20% deposit or more don’t need to pay LMI. Other strategies include using a guarantor or accessing a government scheme like the First Home Guarantee. Q: Does every lender require LMI for high-LVR loans? A: Most lenders do, but some offer alternatives for high-LVR borrowers. Q: Is there a difference between LMI and mortgage protection insurance? A: Yes. LMI protects the lender, while mortgage protection insurance is optional and protects you, the borrower, in case you can’t make repayments. Also read: LMI waivers for medical professionals How a mortgage broker can help reduce your LMI and borrowing costs Navigating the complexities of LMI and other home-buying costs can be overwhelming, but this is where a mortgage broker comes in. At Broker360, we have access to over 40 lenders, allowing us to find loan options tailored to your needs, including those with lower interest rates and better terms. If you’re looking to minimize your LMI or even eliminate it altogether, we can guide you through strategies like government schemes, guarantor options, or refinancing your existing loan to save money. So, get in touch with us for an initial free consultation on how we can help you.
LMI Waivers for Medical Professionals: Save Thousands on Your Home Loan
For healthcare professionals in Australia, buying a home can be more accessible than you think. Many banks and lenders recognize the financial stability of medical professionals and offer Lenders Mortgage Insurance (LMI) waivers, saving you thousands of dollars on upfront costs. If you’re in the healthcare industry, you might qualify for an exemption that allows you to borrow more with a smaller deposit, all while avoiding costly LMI premiums. Here’s a comprehensive guide to understanding LMI waivers for medical professionals, including nurses and doctors, eligibility criteria, and how to take advantage of these opportunities. What is an LMI waiver for medical professionals? An LMI waiver is a special benefit offered to eligible borrowers, allowing them to bypass the cost of LMI. This is particularly advantageous for those who are borrowing more than 80% of a property’s value. For medical professionals, certain banks and lenders provide waivers due to the perceived financial stability and lower risk associated with this sector. For example: Borrowing 90% LVR with an LMI waiver means avoiding costs that could exceed $10,000 on a $500,000 property. Why are medical professionals eligible for LMI waivers? Medical professionals are often viewed as low-risk borrowers due to: Stable and high-income earning potential Strong job security within the healthcare industry A lower likelihood of defaulting on loans These factors make lenders more willing to offer benefits like LMI waivers to healthcare workers, including nurses, doctors, and specialists. Eligibility criteria for LMI waivers While criteria may vary between lenders, here’s what most require: Profession: You must be employed in a recognized medical field. Common eligible professions include: Doctors: General practitioners, surgeons, specialists, and medical researchers. Nurses: Registered nurses, midwives, nurse practitioners, and clinical nurse specialists. Dentists: Oral surgeons, orthodontists, prosthodontists, and periodontists. Allied Health Professionals: Pharmacists, physiotherapists, radiologists, occupational therapists, speech pathologists, and podiatrists. Registration: You must hold valid registration with a recognized professional body, such as: Australian Health Practitioner Regulation Agency (AHPRA) Other industry-specific bodies depending on your profession Loan-to-Value Ratio (LVR): Borrow up to 90% LVR without LMI. Some lenders may extend this to 95% LVR for certain professions. Income level: Certain lenders may impose minimum income thresholds, typically above $150,000 annually, for LMI waivers. Also read: Understanding LMI exemptions and alternatives LMI waiver for nurses Nurses form one of the largest healthcare groups in Australia and are frequently eligible for LMI waivers. Recognizing their essential role and job stability, many lenders extend this benefit to: Registered Nurses (RNs) Midwives Nurse Practitioners Which banks waive LMI for nurses? While policies vary, major lenders offering LMI waivers for nurses include: NAB ANZ Commonwealth Bank Westpac Specialist lenders targeting healthcare workers, among others. Key tip: If you’re a nurse, be sure to work with a mortgage broker who can help you identify lenders with nurse-specific LMI benefits such as us – we have access to 40+ lenders. LMI waiver for doctors Doctors are among the most commonly targeted professionals for LMI waivers due to their high earning potential and low financial risk. Eligible medical professionals include: General Practitioners (GPs) Surgeons Specialists (e.g., cardiologists, dermatologists) Which banks waive LMI for doctors? Most major banks and many smaller lenders offer LMI waivers for doctors. Some even extend the benefit to medical interns, residents, dentists and oral surgeons Just so you know, borrowing up to 95% LVR without LMI is possible for doctors with certain lenders such as ANZ. How to secure an LMI waiver as a medical professional Follow these steps to maximize your chances of securing an LMI waiver: Confirm your eligibility: Ensure your profession and income meet the lender’s criteria. Provide documentation: Prepare proof of employment, registration with professional bodies, and income statements. Work with a mortgage broker: Brokers have in-depth knowledge of lenders’ policies and can match you with those offering the best deals. Also read: How to avoid LMI Benefits of LMI waivers for healthcare professionals Here’s how securing an LMI waiver can significantly reduce your upfront costs and streamline the home-buying process: Save thousands: Avoid LMI premiums, which can exceed $20,000 on high-value properties. Borrow more: Access up to 90-95% of the property value without additional costs. Faster entry: Buy sooner without waiting to save a 20% deposit. How we help healthcare professionals secure LMI waivers Navigating the complexities of LMI waivers and lender policies can be challenging. That’s where we come in. At Broker360, we specialize in helping healthcare professionals, including nurses and doctors, secure cost-effective home loans. Here’s what we offer: Tailored advice: We understand the unique needs of medical professionals and match you with lenders offering LMI waivers. Streamlined process: From eligibility checks to documentation, we handle the paperwork so you can focus on your career. Access to exclusive offers: Our network of lenders includes those with specific benefits for healthcare workers. Take the next step: Contact us for expert guidance and unlock your path to homeownership without unnecessary costs.
Actionable Tips on How to Improve Your Credit Score
Your credit score plays a crucial role in determining your eligibility for loans—whether it’s a home loan, car loan, or personal loan. For first-home buyers and anyone looking to secure financing, improving your credit score can mean better loan terms, lower interest rates, and higher chances of approval. The good news? No matter where you’re starting from, you can take steps to improve your credit score and get mortgage-ready. Here’s everything you need to know about how to improve your credit score in Australia, with actionable steps, examples, and tools to help you along the way. What is a credit score, and why does it matter? A credit score is a number between 0 and 1,200 that represents your creditworthiness. It’s calculated based on your credit history, including loans, credit cards, and repayment behavior. In Australia, credit reporting agencies like Equifax, Experian, and Illion assess this information and assign you a score. Lenders use your credit score to decide: Whether to approve your loan application How much they’re willing to lend you What interest rate you’ll pay The higher your credit score, the lower the risk you pose to lenders—which often means better loan terms. What impacts your credit score in Australia? Understanding what affects your credit score is the first step to improving it. Here are the key factors: Repayment history: Late or missed repayments on loans, credit cards, or bills negatively impact your score. Credit inquiries: Multiple loan or credit applications in a short time frame can lower your score. Credit limits and utilization: High credit limits or maxing out your credit cards can signal financial stress. Length of credit history: A longer, positive credit history helps improve your score. Defaults or bankruptcies: Defaults, court judgments, or bankruptcies stay on your credit report for up to 5 years. Improve your credit score using these 6 steps Improving your credit score doesn’t happen overnight, but steady progress can deliver significant results. Here’s how you can boost your score: 1. Pay your bills on time Your repayment history has the biggest impact on your credit score, so paying bills and loans on time is critical. Actionable tip: Set up automatic payments or reminders to ensure you never miss a due date. Start with smaller bills like utilities, then focus on loans or credit cards. Example: If you’ve missed two credit card payments, making consistent on-time payments for six months can show lenders you’re back on track. 2. Reduce your credit card balances Lenders look at how much of your available credit you’re using (your credit utilization ratio). High balances can drag down your score. Actionable tip: Aim to keep your credit card balance below 30% of your credit limit. Example: If your credit card limit is $5,000, try to keep your balance below $1,500. 3. Limit new credit applications Each time you apply for a loan or credit card, it leaves a hard inquiry on your credit report. Too many inquiries in a short period can lower your score and make lenders cautious. Actionable tip: Avoid applying for multiple credit cards or loans at once. Only apply when you truly need credit. 4. Check your credit report for errors Mistakes on your credit report can unfairly lower your score. Checking your report ensures that the information is accurate and up to date. How to check your credit report: You can request a free credit report from agencies like Equifax, Experian, or Illion once every 12 months. What to look for: Incorrect repayment history Unfamiliar accounts or inquiries Outdated defaults or bankruptcies Actionable tip: If you spot an error, contact the credit reporting agency and the lender to have it corrected. 5. Consolidate and manage debt If you have multiple loans or credit card balances, consolidating your debt can make repayments easier and help improve your credit score. Actionable tip: Speak to a mortgage broker about consolidating debt into one manageable loan with a lower interest rate. Example: Combining three credit card balances into one personal loan can simplify your repayments and reduce overall interest costs. 6. Maintain older accounts The longer your positive credit history, the better for your score. Closing older accounts can shorten your credit history and lower your score. Actionable tip: Keep old accounts open (provided there are no fees) to maintain a strong credit history. Tools to help you improve your credit score Improving your credit score requires consistent effort, but there are tools and services available to make the process easier: Credit monitoring tools Equifax, Experian, and Illion offer credit monitoring services to track your score and alert you to changes. Budgeting apps Apps like Pocketbook, Frollo, and MoneyBrilliant help you manage spending and savings to stay on top of repayments. Debt consolidation calculators Online calculators help you determine how much you can save by consolidating debts. How a good credit score helps with loans A higher credit score can make all the difference when applying for a loan/mortgage: Better interest rates: Borrowers with strong credit scores typically qualify for lower interest rates, saving thousands over the life of the loan. Higher approval chances: A good credit score reassures lenders you’re a low-risk borrower. Lower fees: Some lenders offer fee waivers for borrowers with excellent credit profiles. Example: On a $400,000 home loan, a difference of 0.5% in interest due to a better credit score could save you over $50,000 in interest payments over 30 years. Your next steps to a better credit score If you’re preparing for a home loan or any other type of financing, now is the perfect time to start improving your credit score. For tailored advice on managing debt, improving your finances, or securing the right loan, speak to a trusted mortgage broker.
Can I Buy My First Home With a Guarantor?
Buying your first home can feel overwhelming, especially when you hear that you need a large deposit—sometimes as much as 20% of the property price. But what if saving that much feels impossible? The good news is that yes, you can buy your first home with a guarantor, and doing so can help you enter the property market faster. This guide breaks down how guarantor loans work, the pros and cons, and everything else you need to know to decide if this is the right option for you. What is a guarantor loan, and how does it work? A guarantor loan allows you to purchase a home with the help of a family member (usually a parent) who uses their property as security for your loan. Instead of relying solely on your savings, the lender considers the guarantor’s equity in their home as additional collateral. This arrangement can help you borrow up to 100% of the property’s value without needing a large deposit or paying Lenders Mortgage Insurance (LMI). Essentially, the guarantor reduces the lender’s risk, making it easier for you to get approved. How can a guarantor help first-home buyers enter the market faster? A guarantor loan can help you overcome two major hurdles: 1. No or low deposit requirements Without a guarantor, most lenders require a deposit of at least 20% to avoid LMI. With a guarantor, you can often borrow up to 100% of the property value, meaning you don’t need a large deposit. For example: Property price: $500,000 Deposit without guarantor: $100,000 (20%) Deposit with guarantor: $0 to $25,000 (5% or less) This allows you to enter the market sooner instead of spending years saving a deposit. 2. Avoiding lenders mortgage insurance (LMI) LMI is an insurance premium you pay when your deposit is less than 20%. It protects the lender, not you, and can cost thousands of dollars. By using a guarantor, the lender is protected by the guarantor’s equity, so you don’t have to pay LMI. Example: On a $500,000 home with a 10% deposit, LMI could cost around $10,000 to $15,000. A guarantor loan eliminates this cost. Who can be a guarantor? Most lenders require guarantors to be immediate family members, such as parents, siblings, or grandparents. However, parents are the most common choice. To qualify as a guarantor, they must: Have sufficient equity in their property. Meet the lender’s income and credit requirements. Understand and agree to the risks involved. Some lenders may allow extended family members, such as uncles or aunts, to act as guarantors, but this varies between lenders. Pros and cons of using a guarantor loan While guarantor loans offer clear advantages, there are also risks to consider. Here’s a quick breakdown: Pros Enter the market sooner: No need to save a 20% deposit. Avoid LMI: Save thousands on mortgage insurance. Borrow up to 100%: Some lenders allow you to borrow the full purchase price. Build equity faster: Owning a home sooner lets you benefit from rising property values. Cons Risk to the guarantor: If you default on the loan, the guarantor’s property may be at risk. Strained relationships: Financial stress can impact family relationships. Guarantor limitations: The guarantor may be restricted from borrowing against their property until the guarantee is released. Your borrowing power is still assessed: While the guarantor provides security, you must still prove you can afford the loan repayments. How to remove a guarantor from your loan Once you have built up enough equity in your property or reduced your loan-to-value ratio (LVR) to 80%, you can request to remove the guarantor. Here’s how: Increase your property value: Renovations or market growth can boost your equity. Make extra repayments: Paying more than the minimum reduces your loan faster. Refinance your loan: Switch to a standard home loan without a guarantor. It’s important to regularly review your loan to see when the guarantor can be released. Is a guarantor loan right for you? A guarantor loan can be a great option if: You have a strong income but haven’t saved a large deposit. You want to avoid LMI costs. Your parents or close family members are willing and able to help. However, both you and your guarantor need to understand the risks and responsibilities involved. If you default on the loan, your guarantor’s property could be impacted. Alternatives to guarantor loans If a guarantor loan isn’t the right fit, here are a few alternatives to explore: First Home Guarantee (Home Guarantee Scheme) The federal government’s First Home Guarantee allows you to buy with just 5% deposit and no LMI. Also read: How much deposit do I need as a first-home buyer in WA Keystart loans (WA-specific) In WA, Keystart offers low-deposit loans with no LMI, requiring as little as 2% deposit. First Home Owner Grant (FHOG) If you’re buying or building a new home, you could receive $10,000 through the FHOG, helping reduce upfront costs. Also read: Guide to the WA first home buyers grant Save for a larger deposit While it takes longer, saving for a larger deposit means avoiding the need for a guarantor and reducing risks for both parties. Final thoughts Buying your first home with a guarantor can be a game-changer, helping you enter the market faster, avoid LMI, and reduce upfront costs. However, it’s not a decision to take lightly. Both you and your guarantor need to fully understand the risks and responsibilities. If you’re considering a guarantor loan, speak to a mortgage broker who can guide you through your options and help you decide what’s best for your situation. Related: Understanding stamp duty exemptions & concessions for FHB in WA
How Much Deposit Do WA First-Home Buyers Need Plus Low-Deposit Options
If you’re a first-home buyer in Western Australia, you might be wondering, “How much deposit do I really need?” While the common belief is that you need a 20% deposit to buy a home, the reality is far more flexible. With government initiatives, special loan programs, and lenders offering low-deposit options, owning your first home might be closer than you think. Let’s break it down so you can understand exactly how much deposit you need and what your options are. Do you really need a 20% deposit? The idea of a 20% deposit comes from traditional lending practices—it’s the benchmark where banks will lend without requiring Lenders Mortgage Insurance (LMI). LMI is an insurance premium you pay to protect the lender if you default on your loan. The catch? It can add thousands to your upfront costs. But here’s the good news: you don’t always need 20%. First-home buyers in WA have access to programs and loan options that allow you to purchase with as little as 2% to 5% deposit. Low-deposit home loan options in WA 1. Keystart low-deposit home loans Keystart is a WA-based lender offering low-deposit home loans, specifically designed to help first-home buyers get into the market sooner. Deposit requirement: As low as 2% of the property value. No LMI: Keystart loans don’t require Lenders Mortgage Insurance, saving you thousands upfront. Income eligibility: Keystart has income limits depending on your household size and location, ensuring the program targets those who need it most. Example: For a $400,000 property, a 2% deposit would be just $8,000. Compare that to a 20% deposit of $80,000—it’s a game-changer. 2. First Home Guarantee (Part of the Home Guarantee Scheme) The First Home Guarantee allows eligible first-home buyers to purchase a home with as little as 5% deposit. The federal government acts as a guarantor for the remaining 15%, which means you don’t need to pay LMI. Eligibility: You must be a first-home buyer. The property must meet price caps, which are set regionally. Example: If you buy a $500,000 home with 5% deposit, you’ll need $25,000 upfront instead of the $100,000 required for a 20% deposit. 3. Lenders Mortgage Insurance (LMI): What you need to know If you’re not using a program like Keystart or the First Home Guarantee, most lenders will allow you to borrow with as little as 5% deposit, but LMI will apply. The exact cost of LMI depends on: Your deposit size The value of the property Your lender’s insurance provider While LMI adds to your costs, it’s worth weighing the pros and cons. Paying LMI might allow you to enter the market sooner, potentially saving money if property prices continue to rise. 4. The First Home Owner Grant (FHOG): boosting your deposit If you’re buying or building a new home in WA, you may be eligible for the First Home Owner Grant (FHOG), which provides a one-off payment of $10,000. This grant can go directly toward your deposit or other upfront costs. Eligibility: You must be purchasing or building a new home. The home’s value must be below the regional thresholds: $750,000 south of the 26th parallel or $1,000,000 north. By combining the FHOG with a low-deposit loan, you could reduce your savings target significantly. Also read: Understanding the first home buyers grant for WA Practical tips to help you in saving for a deposit While low-deposit options are available, having a larger deposit can give you more flexibility. Here are a few practical tips to help you save faster: Create a budget: Track your income and expenses to find areas to cut back and save more. Open a high-interest savings account: Park your savings somewhere that earns interest to grow your deposit faster. Reduce unnecessary debt: Pay down credit cards and personal loans to improve your borrowing power. Explore government assistance: Take advantage of programs like the FHOG and the First Home Guarantee. Also read: Guide to stamp duty exemptions for WA first home buyers How much deposit do you need? A quick recap Here’s a simplified breakdown of deposit options for WA first-home buyers: Deposit Option Deposit Required LMI Program Keystart Low-Deposit Loan 2% Not required Keystart First Home Guarantee 5% Not required Federal Government Standard Loan with LMI 5% – 10% Required Private Lenders Traditional Loan (No LMI) 20% Not required Standard Lending Practices As you can see, 20% isn’t the only path to homeownership. Programs like Keystart and the First Home Guarantee make it possible to buy sooner, even with a smaller deposit. Final thoughts Saving for a home deposit might seem overwhelming, but with low-deposit options, government assistance, and a clear strategy, it’s entirely achievable. Whether you’re aiming for 2%, 5%, or more, understanding your options will put you on the right track. If you’re unsure where to start, reach out to us. We’ll connect you with a dedicated mortgage broker who can help you navigate your options, access the best programs, and make your first home a reality.
First Home Buyers Guide to Stamp Duty Exemptions in WA
When buying your first home in Western Australia, stamp duty (or transfer duty) is one of the biggest upfront costs. Thankfully, WA offers generous exemptions and concessions specifically for first-home buyers, significantly reducing this financial burden. Here’s your detailed guide to understanding how these stamp duty benefits work and how to take advantage of them. What is stamp duty? Stamp duty is a tax payable when purchasing property. The amount varies depending on the property’s value and type, making it one of the largest upfront costs for homebuyers. For first-home buyers in WA, exemptions and concessions are available to make buying a home more affordable. Stamp duty exemptions and concessions for first-home buyers 1. Full stamp duty exemption If you’re buying your first home in WA and the property’s value is $430,000 or less, you qualify for a full exemption from stamp duty, meaning you pay nothing. 2. Partial stamp duty concession For homes valued between $430,001 and $530,000, you’ll receive a discounted stamp duty rate, reducing the overall cost. 3. Vacant land exemptions If you’re buying vacant land to build your first home, you may qualify for: Full exemption if the land value is $300,000 or less. Concessional rates for land valued between $300,001 and $400,000. Shared equity arrangements If you are purchasing a property under a shared equity scheme—such as through Keystart’s Shared Ownership program—you may still qualify for stamp duty exemptions or concessions. For example, if you purchase 70% of a $400,000 home through a shared equity arrangement, the stamp duty will be calculated only on your share of the property’s value. This can significantly lower your upfront costs. Make sure to confirm the specific eligibility criteria for shared equity arrangements as they may vary depending on the program. Foreign transfer duty Foreign buyers should be aware that additional foreign transfer duty may apply. This surcharge is currently set at 7% of the property’s value for non-citizens or non-permanent residents. For example, if a foreign buyer purchases a $500,000 property, an additional $35,000 foreign transfer duty would be payable, on top of regular stamp duty costs. If the property is being purchased jointly and one buyer is a foreign person, the surcharge will apply proportionally to their share. For instance, if a foreign buyer and an Australian citizen are jointly purchasing a $500,000 property, the surcharge will apply to the foreign buyer’s 50% share ($250,000). It’s essential to understand these additional costs and factor them into your budget when buying property in WA. Eligibility criteria for stamp duty exemptions To qualify for these benefits, you must meet the following criteria: First-Time Buyer: You and your spouse (if applicable) must not have previously owned residential property in Australia. Australian Residency: At least one applicant must be an Australian citizen or permanent resident. Intended Residence: The home must be your primary place of residence for at least six consecutive months, starting within 12 months of settlement or building completion. How to apply for a stamp duty exemption or concession Applying for a stamp duty exemption is typically handled during the property transfer process. Here’s how it works: Notify Your Conveyancer or Settlement Agent: Let your settlement agent know you’re a first-home buyer eligible for stamp duty benefits. Complete the Required Forms: Your settlement agent will lodge the necessary forms with the WA Department of Finance on your behalf. Provide Supporting Documents: Ensure you have: Proof of identity A signed contract of sale Other documents requested by the Department of Finance Your agent will ensure everything is submitted correctly to avoid delays. Why stamp duty exemptions matter Stamp duty exemptions and concessions can save first-home buyers in WA tens of thousands of dollars. For example: On a $400,000 property, you’ll save approximately $13,500 in stamp duty through a full exemption. On a $480,000 property, a concessional rate applies, saving you thousands compared to standard rates. These savings make a big difference in reducing upfront costs and help you direct more funds toward your deposit or other expenses. Common questions about stamp duty in WA Q: Do I qualify for a stamp duty exemption if I buy a second-hand home? A: Yes, as long as the property is your first home and its value is within the eligible thresholds. Q: Can I combine the stamp duty exemption with the First Home Owner Grant (FHOG)? A: Absolutely! These benefits are designed to work together, maximizing your savings. Q: What happens if I don’t live in the home for six months? A: You may need to repay the stamp duty savings if you fail to meet the residency requirement. Q: Does foreign transfer duty apply to first-home buyers? A: Foreign buyers may still be liable for foreign transfer duty in addition to regular stamp duty. Ensure you understand your obligations if one or more buyers are not Australian citizens or permanent residents. Q: How do shared equity arrangements affect stamp duty? A: Stamp duty is calculated based on your share of the property’s value in a shared equity arrangement, potentially reducing your upfront costs significantly. Taking the next step Understanding stamp duty exemptions in WA can save you thousands and make homeownership more achievable. If you’re ready to explore your options, get in touch with us today. We’ll connect you with a dedicated mortgage broker who can guide you through the process and help you secure all the benefits you’re entitled to.
First-Home Buyer Grants WA 2025: Everything You Need to Know
Buying your first home in Western Australia is an exciting step, but it can also feel overwhelming. The good news? First-home buyer grants in WA for 2025 can make the process more affordable. Here’s your ultimate guide to understanding these grants, eligibility criteria, and how to apply. What is the first-home owner grant (FHOG) in WA? The First-Home Owner Grant (FHOG) is a one-off payment of $10,000 offered by the WA government to eligible first-home buyers. It’s designed to help new homeowners with the purchase or construction of their first property. This grant applies to: Newly built homes: Homes that have never been occupied or sold as residential premises before. Off-the-plan purchases: Contracts to purchase a new home that is yet to be constructed or is still under construction. Owner-built homes: Homes built by the owner or under a building contract for residential purposes. Unfortunately, the FHOG does not apply to established homes unless they are substantially renovated, which means the renovations must make the home essentially new. Eligibility criteria for the first-home owner grant in WA To qualify for the FHOG in WA in 2025, you must meet all of the following requirements by the WA govt: First-time homeownership: Neither you nor your spouse (if applicable) can have previously owned a home in Australia. This includes properties that have been owned jointly or as an individual. Eligible property type: The grant is available exclusively for new homes, off-the-plan purchases, or substantially renovated properties. Established homes do not qualify unless they meet the substantial renovation criteria. Value cap: The property’s value, including the land, must not exceed $750,000 south of the 26th parallel or $1,000,000 north of it. This ensures the grant is targeted toward affordable housing. Residency requirement: You must live in the property as your principal place of residence for at least six consecutive months, starting within 12 months of the settlement or construction completion. Citizenship or residency: At least one applicant must be an Australian citizen or permanent resident. Failure to meet these criteria could result in disqualification or repayment of the grant, so it’s essential to ensure you’re eligible before applying. Additional benefits for first-home buyers in WA First-home buyers in WA are not limited to the FHOG—there are additional schemes and perks that can further reduce the cost of purchasing your first home: 1. Stamp duty concessions Transfer duty (commonly referred to as stamp duty) is one of the largest upfront costs when buying a property. WA offers significant concessions for first-home buyers: Full exemption: No stamp duty is payable for homes valued at $430,000 or less. Discounted rates: Properties valued between $430,001 and $530,000 are eligible for reduced stamp duty rates. These concessions can save you thousands, so be sure to factor this into your budgeting. 2. Keystart loans Keystart is a unique initiative in WA that provides low-deposit home loans to eligible first-home buyers. Key features include: Low deposit requirements: As little as 2% deposit. No LMI: Unlike conventional loans, Keystart loans don’t require lenders’ mortgage insurance, which can save thousands. Support for modest incomes: The program is specifically designed to help buyers who may not qualify for traditional loans. Keystart loans are a great option if you’re struggling to save a large deposit or meet strict lender requirements. 3. Federal home guarantee scheme The First Home Guarantee is a federal program that enables eligible first-home buyers to purchase a property with just a 5% deposit. The government acts as a guarantor for the remaining 15% deposit, eliminating the need for LMI. This scheme can be combined with the FHOG and stamp duty concessions for maximum benefit. How to apply for the first-home owner grant in WA Applying for the FHOG is a straightforward process, but accuracy is key to avoid delays. Here’s how you can apply: Through your lender: Most financial institutions can lodge your FHOG application when you apply for a home loan. This is often the easiest and quickest option. Direct application: If you’re not using a lender to apply, you can submit your application directly through the WA Department of Finance. Required documents: Ensure you have the following ready: Proof of identity (passport, driver’s license, etc.) A copy of the signed contract of sale or building contract Evidence of property value, if required Statutory declarations if applying as a couple Double-check your application to avoid errors or omissions, which could delay processing. Tips to maximize your first-home buyer benefits Look for eligible properties: Focus on new builds or off-the-plan homes that meet the grant’s criteria. Use a mortgage broker: They can guide you through the application process for grants and help you find the best loan options. Plan ahead: Rising property prices can impact your eligibility, so act sooner rather than later to secure a property within the value cap. Combine schemes: Pairing the FHOG with stamp duty concessions and federal schemes can significantly reduce your upfront costs. FAQs about first-home buyer grants WA 2025 Q: Can I use the FHOG for an established home? A: No, the FHOG is only available for new homes or properties that meet the substantial renovation criteria. Q: Can I combine the FHOG with other grants or schemes? A: Yes, the FHOG can be combined with stamp duty concessions, Keystart loans, and federal initiatives like the First Home Guarantee for additional financial support. Q: What happens if I don’t meet the residency requirement? A: If you fail to occupy the home for the required six-month period, you may need to repay the grant in full. Taking the next step Buying your first home is a major milestone, and we’re here to make it easier. Get in touch with us, and we’ll connect you with a dedicated mortgage broker who will help you understand your options, apply for grants, and confidently take the next steps toward owning your dream home.
Why is my redraw amount reducing? What you need to know
If you’ve noticed your redraw amount shrinking or disappearing altogether, you’re not alone. Many Australian borrowers with a redraw facility experience this and wonder, “Why is my redraw amount reducing?” This article explores the main reasons behind changes to redraw amounts, from loan terms and repayment conditions to lender actions. We’ll also look at what you can do to address or prevent these situations and ensure your redraw facility works in your favour. Why does my redraw amount change? Redraw amounts can fluctuate for several reasons. Here are the most common factors: 1. Adjustments due to repayment schedules Your redraw amount is tied to the extra repayments you’ve made on your home loan. If you’re not consistently making additional repayments, or if recent interest rate changes increase your required repayments, your redraw balance may naturally decrease. 2. Loan structure changes If your loan terms are adjusted—such as moving from an interest-only to a principal-and-interest structure—it can affect your redraw amount. With principal-and-interest loans, more of your repayment goes towards the loan balance, leaving less available for redraw. 3. Lender-imposed adjustments Some lenders may reduce your redraw amount as part of their internal policies, especially if your loan is nearing its end or if they’re concerned about your financial position. In rare cases, the lender may restrict or freeze your redraw access. Why has my redraw disappeared? A disappearing redraw amount can be alarming, but it usually happens for one of the following reasons: 1. Loan nearing maturity As your loan approaches the end of its term, your lender may allocate your redraw funds directly towards paying off the remaining balance. 2. Missed or late payments If you fall behind on your loan repayments, your lender might use your redraw funds to cover the missed amounts. This is often outlined in your loan agreement. 3. Refinancing or restructuring If you’ve recently refinanced or restructured your loan, your redraw balance might be affected. Lenders may transfer your extra repayments into a new account or apply them towards your new loan terms. How to address reducing or disappearing redraw amounts 1. Review your loan terms Check your loan agreement or speak to your lender to understand how your redraw facility works and any conditions tied to it. 2. Monitor your repayments Keep an eye on your loan repayment schedule and ensure you’re consistently making extra repayments if possible. 3. Contact your lender If you notice unexpected changes to your redraw amount, contact your lender for clarification. They should be able to explain the adjustments or restrictions. 4. Seek professional advice A mortgage broker can help you assess your redraw facility, identify potential issues, and explore other options like offset accounts or refinancing. Related: What happens to redraw when loan is paid off? Can the bank take my redraw? In certain situations, a lender can restrict or reduce your redraw access. For example: If you’ve fallen behind on payments. If your financial position changes significantly. If the bank deems it necessary to apply the funds towards your loan balance. While these scenarios are typically outlined in your loan terms, it’s important to clarify any concerns with your lender or a mortgage broker. Tips to prevent issues with your redraw Understand the terms upfront: Know how your redraw facility works and what could impact it. Communicate with your lender: Keep your lender informed if you’re facing financial difficulties. Explore alternatives: Consider whether an offset account might provide more flexibility and control than a redraw facility. Also read: 10 questions to ask your mortgage broker before applying for a loan Ready to get the most out of your redraw facility? Managing your home loan can be tricky, especially when redraw amounts change unexpectedly. At Broker360, our expert mortgage brokers can help you make sense of your redraw facility, understand your options, and navigate any challenges. Ready to take charge of your home loan? Connect with a broker today and get personalized guidance.
What happens to redraw when loan is paid off?
Paying off your home loan is a major milestone, but many borrowers with a redraw facility find themselves asking, “What happens to my redraw funds once the loan is fully paid off?” The answer often depends on your lender, loan terms, and how you’ve managed your redraw account. In this article, we’ll unpack what typically happens to redraw balances, potential restrictions, and tips for making the most of your redraw funds before closing your loan. What happens to your redraw balance when your loan is paid off? Once your loan is repaid in full, the funds in your redraw account don’t disappear—they’re still yours. However, how you access them and what happens next depends on your lender’s policies and your loan terms. 1. Lenders may refund your redraw balance In most cases, lenders will transfer any remaining redraw funds to your linked bank account once your loan is closed. It’s worth checking your loan terms to confirm how this process works. 2. Some lenders automatically apply redraws to the loan Some lenders automatically apply any redraw funds to reduce your loan balance as you approach the final repayments. This means your redraw amount is used to pay off the remaining debt, leaving no balance to access after closure. 3. Access to redraw may be restricted before payoff Lenders might impose restrictions on redrawing as your loan nears its end, limiting how much you can withdraw or requiring you to provide notice before accessing funds. How to prepare for loan closure with a redraw account If you have a redraw facility and are close to paying off your loan, here are a few steps to ensure you maximise your redraw funds: Check your redraw balance: Log into your loan account or speak to your lender to confirm how much is in your redraw account. Decide how to use the funds: Plan what you’ll do with your redraw amount—whether it’s reinvesting, saving, or covering other expenses. Contact your lender: Ask your lender what happens to redraw balances at closure. Some may require you to withdraw funds before final repayment, while others may refund them automatically. Financial planning tips for managing your redraw funds Reinvest your funds: Use your redraw balance to invest in opportunities like property upgrades, additional savings, or other financial goals. Pay down other debts: Consider using redraw funds to pay off high-interest debts, like credit cards or personal loans, for greater financial flexibility. Build an emergency fund: If you no longer have a home loan, using your redraw funds to start or grow an emergency fund can be a smart financial move. Consult a professional: A mortgage broker or financial advisor can help you decide the best use of your redraw balance based on your financial goals. Also read: Can I use my redraw to pay my mortgage? Common questions about redraw balances after loan repayment Will I lose my redraw balance if I pay off my loan? No, redraw funds are still yours, but lenders may apply them to the loan balance or refund them to you directly. Can the bank take my redraw? In certain cases, like missed payments or financial hardship, lenders may restrict access to redraws. However, they cannot take your redraw without reason. What if I want to keep using my redraw? If you value the flexibility of a redraw facility, consider refinancing or renegotiating your loan to maintain access before paying it off. Related: Why is my redraw amount reducing? Ready to make the most of your redraw facility? Navigating redraw policies and planning for loan closure can be complex, but you don’t have to do it alone. At Broker360, our expert mortgage brokers can help you understand your redraw options, lender policies, and how to make the most of your funds. To learn more about mortgage redraws and how you can take advantage of them, get in touch with our team.