May 15th, 2025

LMI Concessions in Australia (2025): What Buyers and Investors Need to Know

LMI Insight Image

Transforming Home Buying with LMI Concessions in Australia

Home buyers in Australia, especially those with a deposit of less than 20%, have long faced the added cost of Lenders Mortgage Insurance (LMI). Fortunately, from 2025 onward, new government-backed schemes and policy updates offer ways to reduce—or even eliminate—this expense.

Government Initiatives Easing LMI Costs

Home Guarantee Scheme (HGS): This multi-part scheme, which includes the First Home Guarantee, Family Home Guarantee, and Regional First Home Buyer Guarantee, allows eligible buyers to secure a home with just a 5% deposit. With a government guarantee covering up to 15% of the property’s value, qualifying buyers can avoid paying LMI entirely.

A modern suburban home in Australia

Guarantor Loans: If you have a family member willing to act as a guarantor by offering equity from their property, you may bypass LMI requirements even when you have a low deposit.

Innovative Discounts and Reform Proposals

Green LMI Discount: Insurers like QBE, in partnership with NAB and Bank Australia, are now providing a 5% discount on LMI for buyers of energy-efficient homes. This initiative rewards eco-friendly property investments and helps lower the overall cost.

Proposed Reforms: Recent proposals from the Coalition seek to enhance the competitive nature of LMI-backed loans. If these reforms are enacted, further reductions or an expansion in LMI concession eligibility may be available to more buyers.

Depreciation Guide

Discover the #1 tax secret wealthy Australian property investors use to grow their portfolios faster — even in a high interest rate environment.

  • Learn how to turn wear and tear into wealth
  • See real examples of $15,000+ first-year deductions
  • Understand how to structure your purchases for maximum after-tax ROI

Download Your Free Wealth Building Guide

This ebook reveals how to legally slash your tax bill while building long-term wealth through property. Learn the strategies savvy investors use to gain an edge — even before settlement.

  • Maximise tax deductions and improve cash flow
  • Understand Division 40 vs 43 and how to claim both
  • Position yourself to reinvest and scale faster
Free Instant Access

How Investors Benefit from LMI

For property investors, LMI is more than just an upfront cost—it’s also a deductible expense. LMI can be claimed as a borrowing expense over five years (or the term of the loan, whichever is shorter), and if the property is sold early, any unclaimed deduction can be taken in the sale year.

City skyline with eco-friendly homes, symbolizing green investment

Summary of LMI Concession Options

Concession Type Who Qualifies How It Works
Home Guarantee Scheme First home buyers, families 5% deposit with no LMI due to government backing
Guarantor Loans Buyers with supportive family guarantees LMI waived with the use of a property guarantee
Green LMI Discount Buyers investing in energy-efficient properties 5% discount on LMI fees
LMI Tax Deduction Property investors Deductible expense over a period of up to 5 years

Final Thoughts

Make sure to keep all your documentation and verify your eligibility with your lender. While these LMI concessions can result in significant savings, it's important to note that they come with specific conditions.

Thinking about how to make the most of these opportunities? Chat with us today to discuss your investment strategy and see which options best suit your needs.

You may also like

Related posts

How Depreciation Works When Your Home Becomes a Rental Property

Understanding Depreciation When Your Home Becomes a Rental Property Turning your principal place of residence (PPOR) into a rental can provide valuable tax benefits—if you know how to claim depreciation correctly. This guide is designed to help property investors maximize their deductions and ensure compliance. Can You Claim Depreciation on...

May 6th, 2025
1 month ago
Can You Own Investment Properties and Still Qualify for the First Home Owner Grant?

FHOG Eligibility for Property Investors It might come as a surprise, but even if you own one or several investment properties, you could still qualify for the First Home Owner Grant (FHOG). The determining factor isn’t property ownership—it’s whether you have lived in a property as your primary residence. Key...

May 15th, 2025
1 month ago
Top Property Investing Research and Tax Tips in Australia (2025)

Investing in Australian Property: Strategies and Tax Insights for 2025 As we look toward 2025, the Australian property market is poised with both promising opportunities and notable challenges. Whether you’re an experienced investor or just starting out, adopting the right investment techniques and tax strategies is vital in this evolving...

Mar 23rd, 2025
3 months ago
Straightforward process

Ready to take control of your financial future?

01
Discovery Q&A:

We begin with a personalized discovery Q&A to understand your goals, risk tolerance, and financial situation.

02
Custom Strategy:

Based on your needs, we craft a strategic investment or financial plan tailored just for you.

03
Ongoing Support:

We help you track progress, optimize decisions, and adjust your plan as your life and markets evolve.

04
Financial Freedom:

With a clear roadmap and expert guidance, you move confidently toward long-term wealth and peace of mind.

28+ Years guiding investors
Plan Your Investment Strategy

Understand your goals and build a tailored strategy—whether you're focused on cashflow, capital growth, or long-term wealth creation.

Access the Right Opportunities

Explore high-growth areas, new builds, house & land packages, or SMSF-ready properties matched to your financial profile.

Build Long-Term Wealth

Leverage tax advantages, depreciation, and smart lending strategies to maximise returns and grow your portfolio sustainably.

Start Your Investment Journey

Smart Property Investing Starts Here

Whether you're a first-time investor or growing your portfolio, we provide the guidance, tools, and insights you need to make informed decisions and secure high-performing properties. Let us help you turn property into prosperity.