Nurse home loans: buy with 10% down, and get more of your pay counted

Can a nurse buy a home with a 10% deposit and no LMI?

Yes, at two lenders. Westpac, St.George, Bank of Melbourne and BankSA (the Westpac Group) waive lenders mortgage insurance up to 90% of the price for registered nurses and midwives earning at least $90,000 before tax, on principal-and-interest loans [1]. Bank First waives it for healthcare workers buying their first home, on loans up to $800,000 [3]. Money Brain checked both against the lenders' own policies.

LMI is insurance the lender takes out when you borrow more than 80% of the price, and you pay for it. On a $540,000 loan it can run past $11,000 (part 6). The waiver means a nurse doesn't pay it.

What counts toward the $90,000?

Your own pay before tax from nursing and midwifery work, added up across all your nursing jobs [1]. A second hospital or agency shifts in nursing can count toward it. A partner's income doesn't count toward the $90,000, even on a joint loan.

The $90,000 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 17).

Nurse first home buyer? Your four ways in with less than 20%

The most common nurse question we see is about buying a first home. You have four ways to buy without a 20% deposit, and the right one depends on your price, your savings and your pay.

You can also pay LMI and buy sooner. Which way comes out ahead is worked out on your numbers, not picked from a list. See First Home Guarantee, guarantor home loans, Help to Buy and the first home buyer grants in your state.

What skipping LMI is worth, in dollars

Here's what LMI would cost on a 90% loan for a first home buyer, from one insurer's published rate card [8]. With a nurse waiver, that cost is gone.

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

Worth knowing: the waiver only helps if the lender suits you otherwise. A better rate or a better fit elsewhere can outweigh it over the life of the loan.

Do nurses get a cheaper interest rate?

At Westpac and St.George, a 90% nurse loan is priced at the same rate as an 80% loan, as their business development manager confirmed to Money Brain [12]. Usually, the higher the share you borrow, the higher the rate. So a nurse at those two banks can borrow 90% without paying the 90% price.

How lenders count a nurse's pay

Your base pay is the easy part. What changes your borrowing is how a lender treats everything else on your payslip: overtime, shift penalties, allowances, salary packaging and casual hours. Lenders differ, and the difference can be thousands of dollars a year of counted income.

The next parts set out the rules of the lenders whose credit policy Money Brain has read in our own words [7]. Where we haven't verified a lender's rule, it's left out rather than guessed: CommBank and Bank First aren't in these tables for that reason, so ask us about them directly.

Overtime: which lenders count 100%?

For most workers, several of these lenders count 80% of overtime, because it can stop. Several count all of a nurse's overtime, because they treat nursing as an essential service.

What this means for you: if most of your extra income comes from overtime, the lender you pick can change your borrowing more than the rate does. A lender that counts 80% of $20,000 of overtime counts $16,000; one that counts 100% counts all $20,000.

St.George's own website puts it plainly: nurses can have 100% of their overtime and allowances assessed once they've been with the same employer for six months, and an application without that history may still be referred [2]. You don't have to choose between the waiver and full overtime: St.George says both can count in the same application [2].

Salary packaging: how it can lift what you borrow

Nurses at public and not-for-profit hospitals, and at public ambulance services, can package up to $17,000 a year of their pay without fringe benefits tax. At public benevolent institutions and health promotion charities, the cap is $30,000. Both are grossed-up amounts, per employee [9].

Packaged pay is tax-free, so the same pay can leave you more to repay a loan with. Some lenders count that tax-free part as income in its own right, which can raise what you can borrow. Lenders don't all treat it the same way:

What this means for you: two nurses on the same hospital pay can get different borrowing answers simply because one lender counts their packaging as tax-free income and another adds it back differently, or not at all without paperwork. That's why the packaging statement matters as much as the payslip.

Bring your packaging statement along with your payslips.

Grad year, a new job or probation

Lenders want to see you've started and been paid. At Westpac, a loan without mortgage insurance needs you to have started and received at least one pay. 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 [7]. Whether the nurse waiver loan counts as "without mortgage insurance" for this rule isn't stated in Westpac's policy, so it's a question we put to the lender for you.

Part-time nurses

Permanent part-time pay counts as base pay. Westpac uses the lowest base rate and hours on your payslips, unless there's a reason they vary. One-off unpaid leave can be counted back in if you confirm you're back to your normal hours [7].

Part-time often means overtime, and that's where the lender rules in part 9 matter most.

On parental leave, or going back to work

You can buy while on 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 to show savings that cover the gap, on top of the money for the purchase [7].

With a mortgage-insured loan in that case, Westpac won't lend for an investment.

A second job or agency shifts on top

A second nursing job can help twice: it counts toward the $90,000 for the waiver at the Westpac Group banks (part 4), and it adds to the income a lender assesses. Each lender sets how much history it wants first, usually the same periods as in part 12.

How much can a nurse borrow?

It comes down to three things: what a lender counts of your pay, your debts, and your living costs. Banks then check you could still make the repayments if rates were 3 percentage points higher, the buffer APRA has set since October 2021 [13].

That's why the same nurse can get quite different answers from two lenders. One that counts all your overtime, your penalties and your packaging can lend noticeably more than one that counts part of each. See how much can I borrow.

Buying with a partner who isn't a nurse

You can. At the Westpac Group banks, the $90,000 test is on your own nursing pay, so your partner's income doesn't help you reach it [1]. Your partner's income does count toward what you can borrow together.

At ANZ, if the loan has LMI and you're casual, you can't be the only or main earner, so a partner's income matters there too [7].

Investing or rentvesting as a nurse

St.George says its nurse offer can apply whether you're buying to live in or to invest [2]. Bank First's waiver is for first home buyers only [3]. So a nurse who wants to rent where they live and buy where the numbers work can still look at a 90% loan with no LMI.

Once you own one property, the order you buy the next ones in decides whether you can keep going. That's the work we enjoy most: see using equity to buy an investment.

Overseas-trained nurses and visa holders

If you're registered here and working as a nurse, the same lender rules apply. What changes is your visa: many lenders treat permanent residents like citizens and ask more of temporary visa holders. See home loans for visa holders.

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. Now there's one question left: which lender, for your pay, at the price you want? That depends on your role, your roster, your packaging and your deposit, and it'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.