Beginner's guide to No LMI Loan Income Requirements

What Income Level Do You Need for a No LMI Loan?

Most lenders offering no LMI loans to dental hygienists require a minimum annual income between $90,000 and $150,000, depending on the loan to value ratio you're borrowing at. Some lenders set the threshold at $90,000 for borrowing up to 90% LVR, while others require $120,000 or more if you're looking at a 95% LVR no LMI loan. The specific requirement varies by lender and which professional exemption criteria they apply.

The income thresholds exist because lenders are taking on additional risk by waiving LMI. They need confidence that your income is stable enough to support repayments at a higher LVR without the insurance backstop. In our experience, most dental hygienists working full-time in private practice or public health settings meet these requirements comfortably, particularly if they've been in the profession for a few years and have moved beyond graduate rates.

How Lenders Verify Your Income as a Dental Hygienist

Lenders assess your income differently depending on whether you're employed or contracting. For salaried dental hygienists, lenders typically require recent payslips covering at least the last three months, plus your most recent tax return and Notice of Assessment. They'll look at your base salary, and some lenders will also include regular allowances or overtime if they appear consistently on your payslips.

If you're working as a contractor or operating through your own entity, the assessment becomes more detailed. Lenders usually require two years of tax returns and financials, and they'll assess your net profit rather than gross revenue. Consider a dental hygienist contracting across three practices who invoices $140,000 annually. After deducting vehicle costs, professional indemnity insurance, and equipment, their net income might be assessed at $105,000. That figure determines whether they meet the lender's minimum threshold, not the gross invoiced amount. Some lenders will add back certain deductions like depreciation, but this varies significantly between institutions.

Can You Combine Incomes to Meet the Threshold?

Yes, if you're applying for a home loan with a partner, lenders will combine both incomes when assessing whether you meet the no LMI income requirement. Both applicants don't need to work in eligible professions, but at least one of you must meet the professional exemption criteria as a dental hygienist.

The combined income approach opens up access to higher loan amounts without LMI costs. As an example, a dental hygienist earning $95,000 and a partner earning $70,000 would have a combined household income of $165,000, comfortably exceeding most lenders' thresholds for a 90% LVR no LMI loan. However, lenders still assess your borrowing capacity based on your expenses, debts, and living costs, so meeting the income threshold doesn't automatically mean you'll be approved for the loan amount you're targeting.

What Happens If You're Just Below the Income Threshold?

If your income falls slightly below the required threshold, you have several options. Some lenders offer tiered LMI waivers, where you might qualify for a waiver at 85% LVR even if your income doesn't meet the 90% LVR requirement. The difference in deposit size might only be $15,000 to $20,000 depending on the property price, but it removes the LMI cost entirely.

Another option is to wait until your next pay increase or include additional income sources that you haven't declared. Many dental hygienists pick up locum shifts or work additional days that aren't reflected in their primary employment contract. If those shifts have been consistent for at least three months, most lenders will include them in your income assessment. Timing your application after a payslip that reflects those additional hours can push you over the threshold without changing your actual work pattern.

Does Your Employment Type Affect Eligibility?

Your employment structure impacts both how lenders assess your income and which no LMI products you can access. Permanent full-time and part-time employees typically have the broadest range of lenders available, as their income is considered the most stable. Casual employees can still qualify, but some lenders require a longer employment history, often 12 months in the same role, and they may only assess 80% of your casual income rather than the full amount.

Contractors and those operating through a company or trust structure face tighter criteria. Most lenders require at least two years of tax returns before they'll consider a no LMI loan, though a handful will assess after one year if your income is particularly high. The returns need to show consistent or increasing income across both years. If your most recent year shows a significant drop, even if it's due to taking extended leave or reducing hours temporarily, some lenders will decline the application or revert to assessing you with LMI.

How Recent Pay Increases Are Treated by Lenders

If you've recently received a pay increase, most lenders will accept it immediately as long as you can provide written evidence from your employer confirming the new salary and the date it took effect. A letter on practice letterhead or an updated employment contract is usually sufficient. The increase doesn't need to appear on a payslip yet, though some lenders prefer to see at least one pay cycle at the new rate.

This becomes particularly relevant for dental hygienists transitioning from graduate positions to standard rates, or those moving from public to private practice where remuneration often increases. If your new salary pushes you above the lender's income threshold, you can apply for the waiver immediately rather than waiting several months for payslips to accumulate. The key is having documentation that confirms the increase is permanent, not a temporary or probationary rate.

Income Requirements Across Different Loan to Value Ratios

The income threshold increases as the LVR rises. A lender might waive LMI at 80% LVR with a $90,000 income, require $100,000 at 85% LVR, $120,000 at 90% LVR, and $150,000 for a 95% LVR no LMI loan. Not every lender offers waivers at every LVR tier, and the higher you go, the fewer options you'll have.

For dental hygienists working part-time, this tiered structure can be limiting. Someone earning $80,000 working four days a week might not qualify for a 90% LVR waiver, but they'd comfortably meet the criteria for an 80% or 85% LVR waiver. The deposit requirement increases, but the overall cost might still be lower than borrowing at 90% LVR with LMI, particularly if the LMI premium would have been capitalised into the loan.

What Documentation Should You Prepare Before Applying?

Before approaching a lender, gather your last three months of payslips, your two most recent Notices of Assessment, and a letter from your employer confirming your employment status, income, and job title. If you're contracting, prepare two years of tax returns, any ABN or company financials, and a breakdown of your regular clients or practice locations. Lenders also want to see evidence of your professional registration, so have your current AHPRA registration certificate ready.

The more complete your documentation, the faster the assessment. Incomplete applications often stall because the lender requests additional paperwork, and by the time you provide it, interest rates or lending policies may have shifted. If you're applying with a partner, they'll need to provide the same level of documentation even if they're not in an eligible profession. Having everything prepared upfront also gives you a clearer picture of which LMI waiver options suit your situation before you start the formal application process.

Call one of our team or book an appointment at a time that works for you. We'll review your income documentation, compare the lenders who offer waivers at your LVR, and structure your application to meet the specific criteria each lender applies to dental hygienists.

Frequently Asked Questions