Home loans for accountants: no LMI from a 10% deposit

An accountant home loan is a standard home loan where the lender waives lenders mortgage insurance (LMI) because of your accounting membership. Most offers go to 90% of the value the bank accepts, so you can buy with about 10% plus costs and pay no LMI. CBA and Bankwest stop just under that, at 89.99%.

I'd start with the membership you hold today. An IPA member can have different options from a CPA member, even with the same income and deposit. Then I'd compare the waiver with the other ways you could buy.

General information only. It does not consider your objectives, financial situation or needs. Lender policy, waivers and rates can change.

I line up 6 banks' membership, title and income rules against your own payslips and returns, then manage the application through to settlement. You can probably read a lender policy faster than most people, but that comparison is the hard part. A bank's first answer isn't always the final one either. Here's what we do with your application:

We'd rather talk you out of the wrong structure than into the easy one. If paying LMI or using the government scheme leaves you better off, I'll tell you.

With an accountant waiver, you need about 10% plus buying costs and pay no LMI. ANZ, NAB, Westpac and St George go to 90%. CBA and Bankwest stop at 89.99%, and Bankwest drops to 84.99% for loans above $2m, up to $3m. Without a waiver, you'd need 20% to avoid LMI.

Our 90% no-LMI home loan guide covers the options open to everyone. I'll check what fits your membership, income and property before you rely on a number.

Buying costs are extra

Stamp duty, transfer and mortgage registration fees, conveyancing and inspections all sit on top of your deposit. First home concessions depend on your state and the property. Our buying costs guide breaks them down.

The bank's valuation

Your 90% is worked out on the value the bank accepts. If the valuation comes in under the price, you'll need more cash or a smaller loan.

Say you have $120k saved and you're buying an $800k home in Queensland that the bank also values at $800k. I've allowed $20k for buying costs and assumed any LMI is paid upfront. Your actual duty and fees depend on the property and any concessions you're eligible for.

Example: $120k savings, $800k purchase and $20k assumed buying costs

The waiver leaves you about $14k better off on day 1 than the standard loan. The scheme leaves the most cash, but you'd borrow $40k more and it only works for a first home you live in. CBA and Bankwest stop at 89.99%, so you'd put in about $80 more on this example.

Compared with borrowing 80%, the 90% option needs $80k less towards the price and adds $80k to the loan. At an assumed 6% over 30 years with principal and interest repayments, that extra $80k adds about $480 a month, before fees. I'd check that the higher repayment fits your budget before choosing the smaller deposit.

The LMI calculator estimates about $14.1k for a Queensland purchase at the $800k price, $80k deposit and $720k base loan, including duty on the premium. The premium varies by lender and insurer. Use it with our deposit calculator for an initial comparison of your own figures.

There's no set borrowing limit for accountants. It comes down to the income the bank uses, your living costs and your debts, including HECS. Banks also compare your total debt with your annual income, called your debt-to-income ratio, and each one sets its own limit.

Where accountants see the biggest gap is bonus income. Most lenders count a bonus at 80% and look back over 2 years, so a strong bonus year can count for less than you'd expect.

Use our borrowing power calculator for a starting figure, and our guide to HECS debt for how study debt changes it. I'd then compare lenders on your actual payslips and returns before you set a budget.

2 things matter here: whether you clear the waiver's income minimum, and how much of your pay the bank counts. CBA needs $100k from accounting work per eligible applicant. Westpac and St George need $120k from qualifying professional work, which 2 qualifying applicants can combine. ANZ, NAB and Bankwest don't set a dollar minimum.

Your partner's salary or rental income may help you afford the loan. Whether it also counts towards the waiver's professional income minimum is a separate question.

Take $110k from eligible accounting work. That clears the $100k requirement in one offer, but leaves a $10k gap under the $120k offer unless another applicant's eligible professional income can be included. That gives us a reason to compare another offer before asking you to change your deposit.

Send your recent payslips and employment contract. Your base salary counts in full, whether you work full time or part time. Bonuses are where the banks differ. CBA averages your last 2 years. NAB and ANZ take the lower of the 2 year average and the latest year. Westpac and St George need 2 years with the same employer, not 2 bonuses.

At CBA, the $100k minimum is measured after the bank's own discounts, so a bonus only counts at 80% towards it. As an example, a $90k salary and a $15k bonus is $105k on paper. CBA counts $12k of the bonus, so it sees $102k. That still clears the minimum, but only just.

If you run your own practice or take partnership drawings, the bank wants to see what you personally earn, not the firm's turnover. I cover the partner offers and the 1 year or 2 year question in the partners section below. Our self employed home loan guide explains the wider income rules.

Your membership certificate decides more than your job title does. Chartered accountants with CA ANZ membership and CPA Australia members are accepted by all 6 lenders with an accountant waiver in our comparison. IPA membership works at NAB, Westpac and St George only.

Auditors, CFOs and finance managers can qualify too, but each bank draws the line differently. ANZ only checks your membership, so your title doesn't need to say accountant. Westpac and St George need a listed job (accountant, actuary, auditor, chief financial officer or finance manager) and a listed membership. CBA also names financial controllers, finance directors and partners, and accepts small title differences such as tax accountant or internal auditor.

If you're still finishing the CA or CPA program, the waiver usually has to wait. NAB and Bankwest exclude provisional and student members, ANZ needs you fully qualified, CBA won't count a membership you've applied for but don't hold yet, and Westpac and St George need full membership of a body on their list. Associate or provisional members aren't eligible at any lender we use. A branch can also get this wrong on a job title alone, so I check the written policy before you accept a no.

If your overseas body isn't on a lender's list, there can still be a route to CA ANZ or CPA membership, and we check it before you pay LMI.

ANZ, NAB, CBA, Bankwest, Westpac and St George all offer an accountant LMI waiver, and People First Bank and Suncorp don't. We work with more lenders than the examples here. I'd use these comparisons to narrow the options, then check the rate, fees, offset features and how much income each suitable lender can use. A waiver can still leave you with the more expensive loan.

Salaried accountant buying a home with 10%. I'd compare ANZ and NAB first. Neither sets a dollar income minimum, and ANZ only checks your membership, not your title. If you earn $100k or more from accounting work, CBA joins the list. Westpac and St George come in at $120k, which 2 qualifying applicants can combine.

Self-employed, partner or practice owner. I'd start with CBA, because it accepts sole practitioners who hold membership and can use 1 year of financials for accounting professionals earning $100k or more, for personal borrowers only and with no guarantor. If you're a partner at one of the firms Westpac and St George list, their partner offer can use a letter from the firm. Bankwest's waiver is for PAYG employees only, so it drops out unless you're paid as one.

Provisional member or still finishing the program. For now, I'd compare ubank's no-LMI loan and, if it's your first home, the 5% Deposit Scheme. Neither depends on your membership. Once your full membership comes through, we can see whether moving to a waiver lender saves you money.

If you run a practice, we'll separate your salary, drawings, distributions and business profit before comparing loans. The firm's turnover tells us how much business it does. We need to work out the income you can use personally.

A partner at a selected firm may be able to use an income letter or email instead of supplying the whole practice's financials. Outside that offer, send us your business income records and details of the firm's debts so we can work out what income the lender can use.

How many years of figures you have matters more than you'd think. At Westpac and St George, the accountant offer gives self-employed partners no special treatment, and their 1 year method doesn't allow a waiver at all. To borrow above 80% without LMI there, you'll need 2 years of figures. CBA can use 1 year of financials for accounting professionals earning $100k or more, for personal borrowers only and with no guarantor, and accepts less than 2 years of trading if you've had 12 months or more in the same industry. We'd confirm that works alongside the waiver on your application before you rely on it. If you're a salaried partner, CBA counts your fixed income in full and your profit share or bonus at 80%, using the lower of the last 2 years, evidenced by your partner agreement or an employer letter. CBA treats equity partners as self employed. Our self employed home loan guide explains the other income options.

If part of your income comes as a bonus, or you pay tax by instalments, I'd usually start with a variable loan and an offset account. Your tax money can sit in the offset and cut the interest until the bill is due. Fixing gives you certainty but limits extra repayments. CBA's accountant waiver needs its Mortgage Advantage Package at $395 a year, so I count that fee when comparing it.

An accountant waiver can cover an investment, but the repayment rules change between banks. NAB's waiver covers investment loans to 90%, including interest only, but not interest only on a home you live in. CBA's offer is principal and interest only, and so is Bankwest's, apart from construction drawdowns.

We'd also compare the rent the bank will count, your existing debts and any equity you want to use. If you plan to buy through a company or trust, raise it early. NAB won't grant a waiver to a company or trust, while ANZ, CBA, Westpac and St George can, with conditions on who is the trustee, director or guarantor. Get tax and legal advice on the structure before you sign.

For a first home with 5% saved, the Australian Government 5% Deposit Scheme can beat an accountant waiver, because it needs half the deposit and still has no LMI. The waiver wins for an investment, for a price above the scheme's cap, or if you'd rather borrow less. A family guarantee is the last option I'd reach for, because it puts your parents' home behind your loan.

The scheme has no income cap or waiting list. Buyer eligibility, property price caps and lender approval still apply, and you need to buy a home to live in. For an investment purchase, we'd compare the accountant waiver and other investment loans.

On a $750k purchase, a 10% contribution is $75k. The 5% scheme minimum is $37.5k before buying costs if you qualify.

That's $37.5k less needed towards the price, with the proposed loan rising from $675k to $712.5k. Your savings and the lender's rules affect what you can retain. Before choosing the smaller deposit, check the higher repayment and how much cash you'll have left after buying costs.

A family guarantee loan also creates obligations for your guarantor, and ANZ and Bankwest won't combine their accountant waiver with one. I'd only reach for it once the options you can manage yourself are ruled out.

We can also compare a general 90% loan without LMI, paying LMI or waiting until you have a larger deposit. If you already have 20%, the rate, fees and features matter more because there may be no LMI to waive.

Send the records that match your situation. We can then work out your buying budget and prepare for home loan pre-approval while you search. The property, valuation and any changes to your circumstances still need checking before final approval.

How are we paid?

The lender pays us commission, which we disclose before you proceed. Hunter Galloway is independently owned. Hunter Galloway Finance Pty Ltd is Credit Representative 476903, authorised under Australian Credit Licence 389328.