Accountant home loans: the LMI waiver, lender by lender and membership by membership

Can an accountant get an LMI waiver?

Yes, an accountant can get an LMI waiver at four lender groups we have confirmed, if fully qualified and a member of a body the lender lists. ANZ and the Westpac Group (Westpac, St.George, Bank of Melbourne and BankSA) lend to 90% of the property's value with no lenders mortgage insurance. CommBank and Bankwest lend to 89.99% [1]. Money Brain checked each one against the lender's own policy.

LMI is a one-off insurance the lender takes out when you borrow more than 80% of the value, and you pay for it. A waiver removes it, so a 10% deposit does the work of 20%. On a $1,000,000 home at 90%, that's about $24,120 you don't pay (part 9).

The catch is that a degree or a job title isn't the test. Each lender defines its accountant group by membership of the bodies it names, and a membership one lender takes, another doesn't (part 3).

CA, CPA or IPA? Which memberships each lender accepts

The membership each lender accepts is the real eligibility test, and the four lenders don't accept the same set. All four name Chartered Accountants Australia and New Zealand (CA ANZ) and CPA Australia. All four name CFA charterholders and actuaries holding FIAA. Of the four, only one names the Institute of Public Accountants (IPA) [1][4].

"Named" means the lender's policy lists the body. None of the four names ACCA. If your membership isn't named, don't assume the waiver applies.

Is IPA membership accepted for an LMI waiver?

IPA membership is accepted for an LMI waiver at the Westpac Group banks, and not at the other three of these four lenders. Westpac, St.George, Bank of Melbourne and BankSA name the Institute of Public Accountants, to 90% with $120,000 a year from the profession [1][4]. ANZ's list leaves IPA out, and CommBank's and Bankwest's don't mention it [4].

IPA members meet the same gap on the self-employed side: one lender that accepts a single year of figures from self-employed professionals lists CA ANZ, CPA and CFA accountants, not IPA (part 13) [7].

What this means for you: an IPA member earning under $120,000 from accounting has no waiver among these four lenders. The 5% Deposit Scheme, a family guarantee or paying LMI (part 16) becomes the real comparison.

Provisional, student or still finishing your CA or CPA?

If you're a provisional member, a student member or still finishing your CA or CPA program, the waiver is usually out of reach until you qualify. ANZ asks for fully qualified members. Bankwest excludes student and provisional memberships by name. CommBank treats a CPA application still in progress when the loan is submitted as ineligible [1][4].

Once you're a full member, grade stops mattering. For most bodies the lenders ask for current membership, not a particular level within it. The one exception is actuaries: the lenders name FIAA, which is Fellowship [4].

So timing matters. If you're months from admission, buying after you qualify can open the waiver; buying before means comparing the 5% Deposit Scheme, a guarantor or LMI (part 16).

Minimum income for an accountant's LMI waiver: none, $100,000 or $120,000?

The minimum income for an accountant's LMI waiver is none at ANZ, $100,000 at CommBank and $120,000 at the Westpac Group banks. Bankwest states no floor. After membership, this is the next test [1][4].

What this means for you: a qualified accountant on $95,000 has ANZ, and Bankwest if employed. The same accountant on $125,000 has all four on income, and the choice moves to rate, loan size and conditions.

What counts toward the income floor?

At the Westpac Group banks, what counts toward the $120,000 is your own gross taxable income from the profession. Income from more than one qualifying role can be added together. Rental income can't count toward it [1][4]. So a partner's income in another field doesn't help you reach it, even on a joint loan.

CommBank's $100,000 applies to each applicant who relies on the waiver [4]. Two accountants buying together each need to clear it.

The floor is a minimum, not the whole test. The lender still works out what you can borrow from your full income, your debts and your living costs (part 20).

What an LMI waiver is worth to an accountant, in dollars

An LMI waiver is worth the whole premium you would otherwise pay. Here's what LMI would cost on a 90% loan, from one insurer's published rate card [6]. With a waiver, that cost is gone. On the same card, investors pay a little more and self-employed borrowers pay no extra [6].

These are illustrations from one rate card, not quotes. Your premium depends on the insurer, the loan and the lender.

When the waiver isn't the best deal

The waiver isn't the best deal when its conditions cost you more than the LMI it saves. It ties you to the four lenders that offer it and to their terms: principal and interest at CommBank, Bankwest and the Westpac Group banks, a loan cap at Bankwest, and a package at CommBank [1][4].

If another lender would lend you more, or price the loan better over the years you'll hold it, that can outweigh the saving. And with 20% or more, there's no LMI to waive, so the waiver shouldn't decide the lender.

What this means for you: the waiver is a starting point for the comparison, not the answer to it. On a $900,000 loan it's worth about $24,000 once; a difference in rate is paid every year.

Employed accountants in a firm or in industry

Employed accountants, in a firm or in industry, have the simplest case: payslips and a contract, and all four lenders are open if your membership and income fit. Bankwest's waiver is for employees only, so it's one of your options here and not when you're in practice [4].

Changed firms recently? At Westpac, a loan without mortgage insurance needs you to have started and been paid at least once. A mortgage-insured loan needs 3 months in the job, or less than that with 12 months in the same occupation and no gap of more than 2 months between jobs [11]. Westpac's policy doesn't say which of the two a waiver loan counts as, so it's a question we put to the lender for you.

Partners in an accounting firm

Partners in an accounting firm have a group of their own at the Westpac Group banks: partners of qualifying accounting and law firms can borrow to 90% with no LMI, on a property worth up to $5 million [1].

Elsewhere, a partner is usually assessed the way lenders read self-employed income: from tax returns and the partnership's distributions, not a payslip. That changes both the paperwork and the number (part 14).

Self-employed accountants and sole practitioners

A self-employed accountant or sole practitioner loses one waiver straight away: Bankwest's is for employees only [4]. The conditions we hold for ANZ, CommBank and the Westpac Group banks don't say employees only, but lenders usually read a self-employed income from tax returns and business financials, often over two years.

One lender's guidelines accept a single year of figures from a self-employed accountant who is CA ANZ, CPA or CFA qualified, where the practice has traded at least 12 months and the loan is 80% of the value or less [7].

What this means for you: at 80% there's no LMI to waive, so the one-year route and the waiver never meet. A practice owner with one year of returns and a 10% deposit is choosing between paying LMI now and waiting for the second return. See self-employed home loans.

Here for an accountant's letter or declaration for a home loan?

An accountant's letter or declaration for a home loan is usually what a self-employed borrower needs, not a loan for an accountant. Some lenders offer alt-doc loans that use a letter from your accountant, BAS or business bank statements in place of tax returns. Some lenders accept a draft return if the accountant confirms in writing that it won't change [7]; others, such as MyState, refuse drafts outright [9]. Firstmac may ask an accountant to confirm which expenses were one-off [8].

What the letter must say depends on the lender and the loan, so ask before the accountant writes it, not after. If you're the accountant being asked to write one, the same applies. See self-employed home loans.

Accountant first home buyer? Four ways in with less than 20%

An accountant buying a first home has four ways in without a 20% deposit, and the right one depends on the price, your savings and your pay. You can also pay LMI and buy sooner.

Two things narrow it for accountants. Help to Buy's income limit is $103,000 for one applicant and $165,000 for a couple [13], so the income that clears Westpac Group's floor puts a single buyer over it. The 5% Deposit Scheme has no income cap, but the price has to sit under the cap for the area, and you have to live in the home [12].

See the 5% Deposit Scheme, guarantor home loans, Help to Buy and the first home buyer grants in your state.

Can I use the accountant LMI waiver on an investment property?

Yes, the accountant LMI waiver covers investment property at all four lenders. ANZ, CommBank, the Westpac Group banks and Bankwest extend it to investment loans as well as a home to live in, on the same limits [4]. The 5% Deposit Scheme doesn't: it's for a home you live in [12].

That makes the waiver a tool for rentvesting, renting where you live and buying where the numbers work. Once you own one property, the order you buy the next ones in decides whether you can keep going: see using equity to buy an investment.

Principal and interest, interest-only and building

The accountant waiver is mostly a principal-and-interest loan. CommBank's is principal and interest only, with no interest-only and no construction. Bankwest's and the Westpac Group's accounting group are principal and interest too [1][4]. Whether ANZ allows interest-only under its waiver depends on the loan, so it's a question we put to the lender for you.

If you plan to build, or to pay interest only on an investment, that narrows the four before anything else does.

How much can an accountant borrow?

How much an accountant can borrow comes down to three things: the income a lender counts, your debts and your living costs. Banks check you could still repay if rates were 3 percentage points higher, the buffer APRA expects [14].

APRA also limits each bank to 20% of its new lending to people whose total debts are six or more times their income [14]. On a large loan with a strong income, that ratio can matter as much as the buffer. See how much can I borrow.

Buying with a partner who isn't an accountant

You can buy with a partner who isn't an accountant, and the waiver still rests on you. At the Westpac Group banks the $120,000 has to come from the profession, so your partner's income doesn't help reach it [1][4]. Your partner's income does count toward what you can borrow together.

At Bankwest, the loan has to be in your own names, not a company or trust [5].

On parental leave, or about to be

You can buy on parental leave. Westpac can use your return-to-work pay, base pay only, with a letter from your employer giving your return date, your hours and your pay. Every child counts as a dependant, including one not yet born. If your first repayment falls before you return, you'll need savings that cover the gap, on top of the money for the purchase [11].

What does a broker cost you?

How a broker is paid, and the rule Money Brain holds against it, is set out in full on its own page: what a mortgage broker costs.

Your first move

You've read the rules. One question is left: which of the four lenders, for your membership, your income and the way you're paid, at the price you want? That's what Money Brain works out before anything goes to a lender.

When you're ready, the closing section below is the simplest way to start.