No LMI Loans: What Income You Need and What Not to Assume

How Much Do You Need to Earn for a No LMI Loan?

Income requirements for no LMI loans depend entirely on the lender and the pathway you qualify through. If you're a medical professional applying through a lender offering professional exemptions, you might access a 90% LVR loan with no LMI on an income of $100,000 or more, though some lenders set the bar higher at $150,000. If you're using a family guarantee to avoid LMI at 95% LVR, your income requirement is determined by serviceability, not a fixed threshold, and most lenders will want to see you can comfortably service the loan on your income alone without relying on the guarantor's earnings.

Consider a buyer working as a hospital registrar earning $120,000 who wants to borrow $650,000. Under a medical professional no LMI program, that income meets the lender's minimum requirement and the loan services within acceptable debt-to-income ratios. However, if the same buyer were applying as a teacher on the same income, they would not qualify for a professional exemption and would either need to save a larger deposit or pay LMI unless they had access to a family guarantee. The income figure itself is the same, but the pathway available changes the outcome entirely.

Why Income Thresholds Differ Between Lenders

Lenders set income thresholds for no LMI loans based on their risk appetite and the type of borrower they target. A lender offering a lawyer or accountant exemption may require $120,000 minimum annual income, while another may set the threshold at $100,000 or even waive it entirely in favour of other serviceability measures. These thresholds are not standardised across the industry, and some lenders will assess your income in combination with your deposit size, employment stability, and credit history rather than relying on a single figure.

If you earn $110,000 and one lender's professional exemption requires $120,000, you may still qualify through another lender with a lower threshold or by structuring the application differently. Income is only one part of the assessment, and lenders also factor in your existing debts, living expenses, and whether you have dependents. A buyer earning $130,000 with two car loans and a credit card limit of $20,000 may service less than a buyer earning $110,000 with no other commitments.

How Serviceability Changes the Income Picture

Serviceability is the lender's calculation of whether you can afford the loan repayments, and it affects every no LMI application regardless of the pathway. Lenders apply a buffer of around 3% on top of the current variable interest rate when calculating serviceability, meaning they assess your ability to repay at a rate higher than what you'll actually pay. If you're borrowing $700,000 and your income is $140,000, the lender will calculate repayments as though the rate were 3% higher than the current market rate to ensure you can still afford the loan if rates increase.

In a scenario where a buyer earns $125,000 and wants to borrow $600,000 using a family guarantee to avoid LMI at 90% LVR, the lender will assess whether that income can service the loan alongside existing commitments such as a $400 monthly car loan and estimated living expenses of $2,500 per month. If the buffered repayment amount plus those commitments exceeds the lender's acceptable debt-to-income ratio, the application may not proceed even though the income figure appears sufficient on paper. Reducing the loan amount or clearing the car loan before applying could shift the outcome.

What Happens If You're Just Under the Threshold

If your income falls slightly below the lender's stated threshold for a professional exemption or other no LMI program, you have several options before assuming you need to wait and save more. Some lenders will accept a combination of base salary and regular bonus or overtime income, provided it has been consistent over the past two years and is clearly documented on your payslips and tax returns. If you earn $115,000 in base salary and receive a $10,000 annual performance bonus, some lenders will include that bonus in their assessment, lifting your assessed income to $125,000.

Another option is to apply with a co-borrower, such as a partner or spouse, whose income can be combined with yours to meet the serviceability and threshold requirements. If you earn $105,000 and your partner earns $60,000, your combined income of $165,000 may qualify you for a professional exemption pathway or family guarantee arrangement that neither of you could access individually. The lender will assess both incomes and both sets of liabilities, so this approach works only if your combined financial position is stronger than either alone.

How Employment Type Affects Income Assessment

Your employment type plays a significant role in how lenders assess your income for a no LMI loan. Permanent full-time employees generally have the simplest path, with lenders accepting their base salary and any confirmed allowances or overtime as assessable income. Casual and contract workers can still qualify, but lenders typically require a longer history of consistent earnings, often two years in the same industry, and may apply a discount to variable income to account for instability.

If you're self-employed, most lenders will assess your income using the average of your last two years of tax returns, which can work in your favour if your income has been steady or increasing but may limit your borrowing capacity if your most recent year shows a dip. A buyer running their own accounting practice with declared income of $160,000 over two years may qualify for an accountant exemption and avoid LMI at 90% LVR, but if their most recent tax return shows $130,000 and the prior year $90,000, the lender may average the two and assess them at $110,000, which could fall short of the threshold depending on the lender's requirements.

What Documentation Lenders Want to See

Lenders assessing income for no LMI loans require proof that your income is genuine, stable, and likely to continue. For permanent employees, this typically means your two most recent payslips, a letter of employment confirming your role and salary, and sometimes your most recent tax return or Notice of Assessment. If you receive allowances, bonuses, or overtime, lenders will want to see evidence that this income has been consistent, usually over at least the past 12 to 24 months.

For self-employed applicants, lenders generally require two years of tax returns and Notices of Assessment, and some may also request your business financials or accountant's letter confirming your income. If you're a medical professional working locum shifts or a lawyer with contract income, lenders may ask for a detailed history of your employment contracts and earnings over the past two years to assess consistency. The more variable your income, the more evidence you'll need to provide to demonstrate it is reliable.

Why Professional Exemptions Have Income Floors

Professional exemptions exist because lenders view certain occupations as lower risk due to income stability, career progression, and historically low default rates. Medical professionals, lawyers, and accountants are often granted no LMI access at 90% or even 95% LVR because lenders are confident these borrowers will continue earning well above average incomes throughout the life of the loan. The income thresholds attached to these exemptions reflect the lender's expectation that borrowers in these fields have sufficient earning capacity to service high LVR loans without additional insurance.

If you're a doctor earning $105,000 in your second year out of medical school, you may not meet the income threshold for a professional exemption today, but your income trajectory is likely steep enough that waiting 12 months could shift your eligibility. Some lenders will consider your future earning potential if you can provide evidence of a confirmed salary increase or progression to a higher role, but this is assessed on a case-by-case basis and is not offered by all lenders.

How Deposit Size Interacts With Income Requirements

The more deposit you have, the less weight lenders place on income thresholds for no LMI loans. If you're applying for a family guarantee loan at 90% LVR instead of 95% LVR, the lender's serviceability assessment becomes more forgiving because the loan amount is lower relative to the property value. A buyer with a 10% deposit and an income of $115,000 may find serviceability is not an issue, even if they don't qualify for a professional exemption, because the smaller loan amount reduces the monthly repayment obligation.

In some cases, increasing your deposit by even 5% can shift your application from marginal to comfortable. If you're borrowing $550,000 at 95% LVR and your income of $110,000 just scrapes through serviceability, dropping the loan to $520,000 by contributing a 10% deposit instead can create enough breathing room to satisfy the lender's buffer and debt-to-income requirements without needing to increase your income.

Call one of our team or book an appointment at a time that works for you to discuss which no LMI pathway suits your income, deposit, and circumstances.

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