Could your career choice be the key to lower home loan rates?

You probably already know that your job is pretty important to your home loan prospects. A higher salary generally means greater borrowing power, and if you're self-employed your lender might require extra proof of income to be satisfied you'll be able to repay the loan.

You mightn't be aware, however, that if you work in certain industries, you could qualify for special treatment. Some home loan products are exclusive to certain professions, while some lenders offer discounted or waived LMI premiums for select professionals.

Here's what you need to know.

What is a professional home loan?

There're a few reasons why some lenders have special offers and products available to certain borrowers.

'Essential' workers are viewed as less likely to lose their job, since demand for their services is less likely to change.

There aren't too many unemployed paramedics for example, so essential worker borrowers are seen as less of a credit risk.

A more charitable interpretation (and what lenders would probably prefer you to believe) is that these special products are a way to thank frontline workers for their vital service.

Employees in traditionally higher paying industries can also benefit from a perceived lower risk.

Accountants and lawyers for example may be able to have LMI waived when borrowing with ANZ (this is discussed in further detail below).

Benefits can include lower than usual interest rates, waived LMI premiums and low fees. Some lenders also consider 100% of the overtime payments received by borrowers in select industries when assessing income.

Do you qualify for an essential worker home loan?

Certain Aussie lenders offer exclusive mortgage products to workers deemed 'essential'.

Picture from Helitak430

For example, the Essential Workers Home Loan from G&C Mutual Bank is a low-rate owner occupier home loan available exclusively to essential workers (as of October 2024). That rate is available for borrowers with loan-to-value ratios (LVR) of up to 95% (most lenders charge higher rates for higher LVR loans).

Other benefits include a 100% offset account, no establishment or monthly fees, and a contribution of up to $1,000 towards third party costs like property valuation or mortgage registration.

Eligible professions include:

• Paramedics

• Firefighters

• Police officers

• Nurses

• Teachers

• Defence personnel

Could you be a candidate for a member-owned bank home loan?

There are also several mutual banks that only cater to members employed within select industries.

Customer owned banks aren't run for profit, so can have competitive rates compared to commercial banks.

Below are a few examples of member-owned banks that offer home loans exclusively to employees in select fields and their immediate families.

Many of these outfits are part of the Teachers Mutual Bank Group (TMBG). Divisions within the TMBG all offer the Your Way owner occupier home loan, with the option to add an offset account. Advertised rates are the same between different TMBG brands.

Home loans exclusive to medical professionals

• Health Professionals Bank is currently the only Australian bank exclusive to healthcare professionals and their families. It's part of the TMBG, so offers the Your Way home loan.

Home loans exclusive to those in education

There are two divisions of the TMBG that cater to employees in the education sector:

• UniBank also offers the Your Way home loan to those who work within higher education, as well as students and even graduates

• Membership in Teachers Mutual Bank is available for current or retired employees in the Australian education sector, as well as their families

Home loans exclusive to other professions

There are a couple of other professions catered to by mutual banks, for example:

Australian Defence Force members

• Defence Bank and Australian Military Bank lend to current or past Australian Defence Force (ADF) personnel. Both offer a range of home loans, including mortgages under the Defence Home Ownership Assistance Scheme (DHOAS), which assists current and former ADF members to buy a home

Emergency service workers

• Police Bank and Firefighters Bank are also divisions in the TMBG offering home loans to those in their representative industries.

• QBank offers banking services exclusively to those working in Queensland emergency services and justice provision.

• BankVic provides deposit and loan products to police, emergency service and health care workers, and government employees

Picture by Zoe Askew on Unsplash

Could your profession grant you an LMI waiver?

The general rule is that Lenders Mortgage Insurance (LMI) is charged to borrowers whose LVR exceeds 80%, but some lenders relax this for certain professions.

This is generally on the grounds that these roles are typically more secure, so there's less risk of the borrower losing their job and running into trouble repaying the loan.

Here are a few examples:

Westpac

Those borrowing with Westpac mightn't have to pay LMI on loans up to 90% LVR if they are a medical professional. If you have a traditionally high paying role (a doctor or specialist for example), you might be able to borrow up to 95% LVR and still not pay LMI.

Westpac also allow some frontline applicants to have overtime income assessed at 100%.

ANZ

ANZ offers LMI waivers to some professionals in the medical, accounting, or legal industry. To qualify, you'll need to have a current membership with an approved institute within your field.

People's Choice

Mutual bank People's Choice offers its Essential Services package to nurses, paramedics and police officers, allowing them to borrow with an LVR of up to 90% without paying LMI.

Read more: Are you eligible for an LMI discount?

On the hunt for an owner occupier home loan? Here are some of the top products available in Australia at the moment

Important Information and Comparison Rate Warning

Article first published June 2009; last updated October 2024. Header image by Ben Rosett on Unsplash