Nurse Home Loans

Do banks offer nurse home loan discounts?

Nurses don’t automatically get access to special doctor home loan discounts but, with some creativity, you can still get a great deal:

• Waived Lenders Mortgage Insurance (LMI) when borrowing up to 90% of the property value: You need to prove that you have stable employment with a strong and consistent income.

• Discounted interest rates: You generally need to be borrowing over $250,000, or applying for a professional package.

Do I Qualify for An LMI Waiver?

You qualify for a nurse home loan deal if you are working in the following capacities:

• Registered Nurse
• Midwife
• Nurse Educator and Researcher
• Nurse Manager
• Enrolled Nurse
• Nursing Support and Personal Care Worker

How much can I borrow?

You may be able to borrow up to:

• 80% of the property value: This is an ideal Loan to Value Ratio (LVR) in some ways, as you won’t need to pay LMI. You’ll need a 20% deposit; for example, if you are buying a $500,000 home, you’ll need a $100,000 deposit to borrow $400,000.

• 85% of the property value: Unlike for higher LVR loans, the lending criteria for borrowing 85% is less strict and LMI is significantly cheaper or you can avoid it completely.

• 90% of the property value: You can borrow at 90% LVR as long as you can meet certain strict lender requirements. This usually includes having clean credit history, timely repayment of debts, and stable employment with a strong income.

• 95% of the property value: You’ll need to qualify based on even more strict lender criteria for a 95% home loan and most lenders will need you to have at least 5% in genuine savings. To improve your chances, you must have a clean credit history, stable employment, good income, minimal debts and must not be purchasing an unusual property type or one in a remote location.

• More than 95% LVR: With a guarantor home loan, you can borrow up to 105% of the property value. This way, you don’t need a deposit and can avoid paying an LMI premium as well.

You can go through the bank lending criteria page for more information or get an estimate using our borrowing power calculator.

Lastly, if you’re earning a high income and have been working in the same industry for over three years, you may be eligible for a 100% home loan with no LMI and no guarantor. The lending criteria is strict and the interest rates are higher on these home loans, so they are not suitable for everyone.

Will lenders consider 100% of my overtime income?

For most borrowers, lenders will consider only 50-80% of your overtime income, which can significantly reduce your borrowing power.

Nurses, on the other hand, are essential services workers so some lenders will accept 100% of your overtime income.

Not all banks understand that nurses do shift work and earn shift penalties so lender choice is essential.

Most lenders will need you to provide:

• An employment letter confirming that you have been receiving overtime income regularly for the past one or two years, depending on the lender.
• Two of your most recent payslips.
• Your most recent group certificate.

What about fringe benefits?

Apart from assessing overtime income, many lenders make mistakes when assessing fringe benefits.

In many cases, nurses receive a portion of their income in the form of fringe benefits, which is non-taxable income.

This income is typically credited directly into your bank account or the funds are automatically deducted from your earnings to pay off a debt, such as a mortgage or a car loan.

The common mistake that lenders make is including fringe benefits as taxable income, which can greatly reduce the amount you’re eligible to borrow.

Luckily, there are some lenders that consider this income tax-free.

Will banks consider second job income?

Yes! Some banks recognise that most essential services workers do shift work and have a second job to supplement their income.

Generally speaking:

• The second job needs to be in the same line of work, so working as an aged care worker or a first aid trainer/assessor on the side will typically be acceptable.
• Your income may be shaded by between 50-80%.
• Some lenders will accept 100% of your income if you can show that you have a 6-12 month work history with your second employer and have been earning a regular income.
• Some lenders will consider less than 3 months work history if you’re in a strong financial position with a clear credit history.

Can I avoid the cost of LMI because I’m a nurse?

Lenders won’t automatically offer you waived LMI because you’re a nurse.

However, because you work in a low risk profession, you’re more likely to qualify for 90% no LMI, which is waived LMI when borrowing up to 90% of the property value.

You’ll need to meet additional lenders requirements:

• You must not be borrowing more than 90% LVR.
• The maximum loan size is $5,000,000.
• Your credit file is free of any bad credit records.
• You have a strong income. Lenders prefer borrowers with an annual income of over $90,000.
• You have stable employment.
• You’re buying a property. However, some lenders may accept refinances to purchase a property.

What if I don’t meet the above criteria?

If you currently have a 10-15% deposit, saving a little more to get to 20% is another option for you to avoid LMI completely.

The only exception is if you’re borrowing at 80% with a low doc loan.

Our mortgage brokers are specialists in nurse home loans. They know which lenders offer these discounts to nurses and which lenders are more conservative with their requirements.

You can call us on 1300 889 743 or fill in our free online assessment form to find out what offers are available for your situation.

Are first home buyer discounts available?

If you’re a first home buyer, you can get a discount of up to 15% on your LMI premium with select mortgage insurance companies.

You won’t get the discount if your lender doesn’t deal with these specific LMI providers.

Please note that in most cases, you must not be borrowing more than $600,000. Also, if your deposit is from a borrowed source then you won’t qualify.

Luckily, you can use the First Home Owners Grant (FHOG) as your deposit. However, it may not be enough on its own.

If you’re unsure about whether or not you qualify for the grant, you can find out in the FHOG website.

How can I reduce my LMI premium?

If you don’t qualify for waived LMI, you can still reduce your premium to a more reasonable amount.

To avoid a high LMI premium, you’ll need to consider:

• The loan size: For a larger loan size, you’ll have to pay higher mortgage insurance costs. Generally, for a loan size of up to $300,000, LMI will be much cheaper. Larger loan sizes of up to $500,000 will have moderate LMI. If you’re borrowing over $500,000 then LMI will be very expensive. So if you’re borrowing $300,001, you can immediately save as much as $800 by borrowing just $1 less.

• The LVR of the mortgage: Like the loan size, you’ll have to pay more LMI on a higher LVR mortgage. It should be noted that when you borrow even $1 over 90% or 95%, there will be a significant increase in the amount of LMI you’ll have to pay. By reducing your loan amount just a little bit, you can easily save over a thousand dollars or so.

• The lender and mortgage insurer: Policies related to LMI premium differ from lender to lender. Even mortgage insurers don’t all have the same mortgage insurance rates. This is because they price their premiums according to their personal view of different loan types, loan amounts and types of borrowers.

We know which lenders and mortgage insurers offer the cheapest LMI premiums. Please complete our free online assessment form or call us on 1300 889 743 to speak with one of our specialist mortgage brokers.

How can my deposit source change my LMI premium?

The standard LMI product of almost all mortgage insurers typically targets people that can show that they have a saved deposit. However, some lenders may also offer no genuine savings solutions.

The source of your deposit can change your LMI premium. Here’s how:

• If you have at least 5% in genuine savings, you’re eligible for standard LMI rates.

• If you can’t show that you have genuine savings then you may need to pay a higher mortgage insurance premium.

• You’ll likely have to pay an even higher LMI if you don’t have genuine savings and you have a borrowed deposit such as a personal loan or loan from parents.

Please note that different lenders have different policies regarding this. Some may have a set of premiums that apply to all borrowers while others may consider it depending on various factors.

Applying with the right lender is key!

Even if you’ve received overtime income for just three months, we may be able to help you find a lender that can consider 100% of this income.

Please call us on 1300 889 743 or complete our free online assessment form and we can help you apply with the right lender.