Are you a teacher or other educator dreaming of buying your first home or investing in property? You may be wondering how to make the process more affordable. At Home Loan Experts, we’re here to help with competitive interest rates, special loan discounts and, most importantly, Lenders Mortgage Insurance (LMI) waivers that could save you thousands.
Typically, LMI is required when borrowing more than 80% of a property’s value. As a teacher, however, you may be eligible to borrow up to 90% of the home’s value with LMI waived, provided you meet the lender’s requirements. This allows you to purchase your dream home or investment property with a smaller deposit, making homeownership more accessible.
Let us help you find the right loan for your needs, with exclusive savings and perks created just for you.
How much can teachers borrow?
- Borrow up to 95% of the property value: You’ll need a clean credit file, regular income (casual teachers are accepted), and buying a standard residential property in a metro location.
- Borrow up to 110% of the property value: A guarantor loan allows you to borrow 100% of the property value plus the purchase costs.
- Negotiated interest rates: We have strong relationships with major banks and lenders, so we get to negotiate a competitive interest rate.
90% LVR, No LMI For Teachers
As a teacher or educator, you could be eligible for a 90% home loan with no LMI. Also, there is no minimum income requirement.
To qualify for no LMI on a 90% LVR home loan:
- You must buy a residential property (Only Category 1 and 2 locations accepted)
- You need a minimum of $5,000 genuine savings over six months. Rent paid via lease agreement is accepted as genuine savings.
- You do not require a university degree
- The maximum loan amount is $1.35 million for metro locations and $1 million for non-metro locations.
- For joint applications, either applicant can be a teacher to qualify for waived LMI.
What is waived LMI?
LMI stands for Lenders Mortgage Insurance, which the homebuyer normally pays the lender when borrowing more than 80% of the property value. As a teacher, however, you can borrow up to 90% of the property value without paying LMI.
Here’s how much you save on LMI fees:
| Property Value | Loan Amount | LVR | Savings With Waived LMI |
|---|---|---|---|
| $700,000 | $630,000 | 90% | $15,674 |
| $800,000 | $720,000 | 90% | $17,913 |
| $900,000 | $810,000 | 90% | $20,152 |
| $1 million | $900,000 | 90% | $22,392 |
*Results from our Home Loan Experts’ LMI calculator, based on a new purchase of a home as a primary place of residence in the state of New South Wales.
What Are The Eligibility Requirements For Teacher Home Loans?
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Must be at least 18 years old.
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Must be an Australian citizen or permanent resident.
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Must have a stable employment history in the education sector, typically for at least 6-12 months in your role.
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Must have a strong income and be able to provide evidence of your income, such as payslips and tax returns, from both your primary and secondary jobs (if applicable).
Mutual banks offer an additional discount for essential workers. You have to be a member to get the benefits.
Can Casual/Part-Time Teachers Also Qualify?
Yes, if you’re a casual or part-time teacher you can indeed qualify for home loan benefits for teachers. Here are some points on how lenders assess your income:
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Overtime income: Our Home Loan Experts know lenders that will allow 100% of overtime income to be factored into your loan application, which can improve your borrowing capacity.
- Calculation of casual income: Our Year-To-Date (YTD) calculator projects your casual income for 40-48 weeks based on your earnings so far, to provide a comprehensive view of earning potential.
With our expertise, we can help you further optimise the loan application process by making sure we follow all the bank’s rules, so you can borrow as much as possible for your situation.
What Kinds Of Teachers Or Other Education Professionals Qualify For Discounted Home Loans?
Positions on the list below qualify for home loans discounted for teachers:
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Pre-Primary school teacher
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Primary school teacher
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Secondary school teacher
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Special needs teacher
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Special education teachers
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University lecturer
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University tutor
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Vocational education teacher
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English as a second language teacher
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School principal
How Will The Lender Assess My Income?
When assessing income for teachers, banks are sometimes cautious due to teachers’ unique work structure. They typically consider only 40-48 weeks of income annually to account for holiday breaks. Some lenders may accept overtime income.
They may also accept as income the higher wages paid under the Higher Duties Allowance (HDA), which dictates a higher wage for teachers who take on higher-grade tasks and responsibilities. This can enhance borrowing capacity.
Lenders also evaluate factors like employment status, liabilities and credit score. Teachers may need to provide tax returns, financial statements and payslips as proof of income.
Required Documents For Applying For Teacher Home Loans
To apply for a home loan as a teacher in Australia, you will need to provide the following documents:
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Home loan application: Complete a home loan application form and send it to the lender with supporting documentation.
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Identification: Provide documents such as a driver’s licence, passport or other acceptable forms of ID.
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Employment letter: You may be required to provide a letter of employment to prove your current and upcoming employment status, including your employment history, role and any future employment contracts.
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Payslips: Provide payslips for the past three months to demonstrate consistent income.
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Bank statements: Provide bank statements for the past three months to show regular salary credits.
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Purchase contract: If the application involves a purchase of a property, provide the purchase contract.
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Savings statements: Provide statements to show your savings history.
You can also check out our home loan application checklist for a more extensive list of required documents.
What If I Am Teaching As A Second Job?
You can include income from a second job as a teacher when applying for a home loan. It’s common for teachers, particularly those employed on a casual basis, to work a second job to supplement their income.
Perhaps you work as a tutor on the side, focusing on particular specialities like maths or English. This may be on a contract or freelance basis with other public schools, through a private education provider or as a self-employed tutor.
Generally speaking:
- The second job needs to be in the same line of work so a role as a tutor will typically be accepted.
- Some lenders will accept 100% of your income if you can show that you have a 6- to 12-month work history and have been earning a regular income.
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If you’re self-employed, you need to have been working for at least 2-3 years and provide your tax returns, Notices of Assessment (NOAs) and an accountant’s letter to verify your income.
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Some lenders will consider approval with less than three months’ work history if you’re in a strong financial position with a clear credit history.
- It’s best to provide all of your income evidence from both roles, including payslips and tax returns, up front.
Explore The Possibilities Of A Teacher Home Loan Today!
Whether you’re a casual teacher, part-time lecturer or school principal, we’re here to assist you every step of the way. At Home Loan Experts, we share your passion for making a difference. Let’s make your dream of owning a home a reality together!
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