Refinance Your Home Loan. Remove LMI.
If you are a qualifying professional paying Lenders Mortgage Insurance on your current loan, you could refinance to a lender that waives it, potentially saving thousands in remaining premiums and lowering your repayments.
Why You Are Still Paying LMI (And How Refinancing Fixes It)
If you bought your home with less than a 20% deposit, you almost certainly paid Lenders Mortgage Insurance. And if that LMI premium was capitalised onto your loan (as it is for most borrowers), you are still paying for it today, every single month. Capitalised LMI is added to your loan balance, which means you pay interest on it for the entire life of the loan. A capitalised LMI premium of $15,600 at 6.5% interest over 30 years generates approximately $19,900 in additional interest charges. The true cost of that LMI premium becomes $35,500.
When you refinance to a new lender, your old loan is discharged and replaced with a fresh one. If that new lender offers an LMI waiver for your profession, your new loan does not include LMI at all, even if your LVR is still above 80%. The capitalised LMI from your old loan is gone. Your new loan is sized to your actual property debt, without the LMI premium baked in.
LMI policies are specific to the lender and the loan. If you refinance to a different lender, the LMI you paid on your original loan does not carry across. Normally, this would mean paying LMI again if your LVR exceeds 80%. This is exactly why the professional waiver matters for refinancing: instead of paying LMI twice, qualifying professionals can refinance to a lender that waives the requirement entirely.
What Could You Save by Refinancing?
The savings from refinancing come from three sources: eliminating the capitalised LMI premium from your balance, removing the interest you would pay on that premium over the remaining loan term, and (in many cases) securing a lower interest rate. On an $850,000 loan, removing $15,600 in capitalised LMI saves nearly $22,000 in total interest, and your repayments drop by roughly $103 per month from day one.
We compare 50+ lenders to find you the best LMI waiver
Three Ways Refinancing Removes LMI
Not every homeowner takes the same path. The right strategy depends on how long you have held the property, your current equity, and whether your profession qualifies for a waiver.
Path 2 (professional waiver) is the most powerful option for qualifying professionals. It means you do not have to wait until your equity reaches 20% to refinance without LMI.
Not Sure Which Path Is Right for You?
Our free eligibility check compares both government and professional waiver options in 60 seconds.
Which Professions Can Refinance Without LMI?
LMI waivers on refinancing are available to the same professions that qualify for waivers on new purchases. The maximum LVR may vary by lender and by whether the property is owner-occupied or investment.
The waiver applies in the same way whether you are purchasing or refinancing. The new lender assesses your profession, income, and serviceability, then waives the LMI requirement on the new loan. You do not need to fill out a separate waiver form or contact the insurer directly.
For investment property owners who are currently paying interest on capitalised LMI, the case for refinancing is often even stronger than for owner-occupiers, because the ongoing interest cost of capitalised LMI directly reduces your net rental yield.
Not a first home buyer?
Professional LMI waivers are available to any qualifying professional — upgraders, downsizers, and second home buyers included. The government scheme is not available to you, but a professional waiver offers the same savings with no restrictions on purchase history.
Professions eligible for LMI-free refinancing
LVR limits vary between lenders. A mortgage broker can identify the best option for your specific situation.
Why Professional Waivers Are Powerful for Refinancing
- You do not have to wait until your equity reaches 20% to refinance without LMI
- The waiver applies to the new loan regardless of the LMI status of your old loan
- Combined with a lower interest rate, the total savings can exceed $50,000 over the life of the loan
- Investment property refinancing is available for qualifying professions (typically at 85-90% LVR)
Should You Refinance Now or Wait?
The answer depends on your current situation. Here are the three most common scenarios.
Your LVR is already below 80%
If your property value has risen or you have paid down enough of your balance, there is no reason to wait. You can refinance to any lender without LMI. If you also qualify for a professional waiver, even better: it gives your broker more lenders to compare for a more competitive rate.
Your LVR is above 80%, but you qualify for a professional waiver
The professional waiver becomes a genuine refinancing strategy. You do not need to wait until you hit 20% equity. Run the numbers: if LMI savings plus rate improvement exceed the cost of switching, refinancing now makes financial sense.
Your LVR is above 80% and you do not qualify for a waiver
Without a professional waiver, refinancing above 80% LVR means paying LMI again. Your options are: wait for equity growth, make extra repayments to reduce your balance faster, or request a property revaluation through your current lender.
Refinance Now vs Wait: A Worked Example
See how the numbers compare for a real-world refinancing scenario.
Lisa's current LVR is 76% ($662,000 / $870,000). She refinances to a lender offering a professional waiver for nurses at 6.25% (down from 6.65%). Her monthly repayments drop by ~$210 from day one. She no longer pays interest on the capitalised LMI, and her repayment reduction covers the refinancing costs ($800 total: discharge fee, registration, valuation) within 4 months. If your refinance also secures a lower rate, the combined savings from LMI removal plus rate improvement can be substantial.
Mark's LVR is still 87.5% ($700,000 / $800,000), well above the normal 80% threshold. Without a professional waiver, he would need to pay LMI again on the new loan. His teaching qualification qualifies him for a waiver at 90% LVR. He refinances at 6.30% (down from 6.75%) and saves ~$198/month from day one. Break-even on refinancing costs of ~$1,200 (net after cash-back) occurs within 6 months. Total saved over the remaining 27 years: approximately $38,200.
LMI Refund vs Refinancing: Which Saves You More?
Some homeowners explore getting an LMI refund instead of (or alongside) refinancing. Here is how the two options compare.
How LMI Refunds Work
When you discharge your original loan (through sale, refinancing, or full repayment), you may be eligible for a partial LMI refund from the insurer. The refund decreases over time: ANZ may refund up to 50% within 12 months, Bankwest up to 25% within 12 months, while CBA offers very limited refunds, and NAB and Westpac consider refunds on a case-by-case basis. After 24 months, refunds are generally nil. Refund policies are ultimately determined by the LMI insurer (QBE, Helia, or Arch), not the lender. Administration fees may reduce the net refund.
When to Seek a Refund
An LMI refund makes sense if you took out the loan within the last 12 months, you paid a large LMI premium (the refund is proportional to the original premium), and you can confirm the refund with your lender before discharging. After 12 months the potential refund drops significantly, and after 24 months it is typically zero.
When Refinancing Saves More
For most homeowners, refinancing offers significantly greater savings than an LMI refund, especially if your loan is more than 12 months old. A homeowner who paid $12,000 in LMI 18 months ago might receive a 15-25% refund ($1,800-$3,000) after admin fees. By contrast, refinancing to remove that capitalised LMI saves them from paying interest on $12,000 for the remaining 28.5 years, a total saving of approximately $15,000 in avoided interest, plus whatever they save from a better rate.
Can You Do Both?
Yes. If your loan is less than 12-24 months old, you can refinance to a new lender with an LMI waiver and also apply for a partial refund of the LMI paid on the original loan. The refund comes from the original lender's insurer and is separate from the refinance process. This is the best-case scenario for borrowers who purchased recently and have since realised they qualify for a professional waiver.
Check if you qualify for bothRefinancing Costs vs Savings
Refinancing is not free. But the costs are typically modest and often fully offset by lender cash-back offers.
Typical Switching Costs
Total switching costs typically range from $450 to $1,800. This includes your current lender's discharge fee ($150-$400), government registration fees ($100-$300), valuation fee ($0-$600), and settlement or legal fees ($200-$500). Many lenders offer free desktop valuations.
- Discharge fee from current lender: $150-$400
- Government registration fees: $100-$300
- Valuation fee: $0-$600 (often free)
- Settlement/legal fees: $200-$500
Cash-Back Offers
Many lenders offer cash-back incentives of $2,000 to $4,000 to attract refinance customers. A $3,000 cash-back on a refinance with $1,200 in switching costs means you are effectively paid $1,800 to switch.
What to Watch Out For
Check for fixed rate break costs (can be thousands if you exit a fixed rate early), clawback clauses on cash-back offers (typically 2-4 years), and ongoing fees (annual fees, package fees, offset account fees). We factor all of these into our refinance comparison.
- Fixed rate break costs (check before proceeding)
- Cash-back clawback clauses (typically 2-4 year period)
- Compare ongoing fees between current and new loan
Refinancing an Investment Property
LMI waivers are not limited to owner-occupied properties. Many lenders extend professional waivers to investment property refinances, though the terms differ.
- Lower maximum LVR: most lenders cap investment waivers at 80-90% LVR (vs 90-95% for owner-occupied)
- Higher income requirements: lenders assess serviceability more conservatively, factoring rental income at 80% of market rent
- Interest rate differential: investment rates are typically 0.20-0.50% higher than owner-occupied
- Tax implications: LMI on an investment property is tax-deductible as a borrowing expense over 5 years. If you receive an LMI refund, it may affect your deduction. Speak with your accountant.
Estimating Your Current LVR
Many homeowners do not know their current LVR because they have not had their property revalued since purchase. To estimate, divide your current loan balance (check your latest statement) by your estimated property value (check recent comparable sales on Domain or realestate.com.au), then multiply by 100. For example, a $680,000 balance on an $850,000 property = 80% LVR. If your estimate is below 80%, you can likely refinance without LMI from any lender. If above 80% but below 90-95%, a professional waiver may cover the gap.
How to Refinance and Remove LMI
The refinance process is straightforward, particularly when a broker handles the lender comparison and application.
Check Your Eligibility
Tell us your profession, current loan details, and property value. We will identify which lenders will refinance you without charging LMI, and whether you are likely to qualify based on income and serviceability. This takes about 60 seconds.
We Compare Refinance Options
We look at the full picture: LMI savings, interest rate, fees, cash-back offers, and loan features. We compare more than 50 lenders to find the refinance that saves you the most when all costs and benefits are considered.
Settle Your New Loan, LMI-Free
Your new loan replaces your old one. The capitalised LMI from your original loan is gone. If your new rate is lower, your repayments drop too. The entire process typically takes 2 to 4 weeks from application to settlement.
Refinance Eligibility Requirements
- Employment in a qualifying profession recognised by LMI waiver lenders
- Existing home loan (owner-occupied or investment) that you are looking to refinance
- Current LVR at or below the maximum for your profession (typically 90%, or 95% for doctors)
- Meet the new lender's income and serviceability requirements, including any existing debts
- Standard residential property security (house, apartment, townhouse)
- Clean credit history with no significant adverse events (some lenders accept minor exceptions)
Even if you think your LVR is still high, property growth since your purchase may have reduced it. We will help you estimate your current LVR and determine your best refinance option.
Refinance to Remove LMI FAQs
Common questions about buying with a 10% deposit and no LMI.
Do you have to pay LMI again when you refinance?
Can you get a refund on LMI you have already paid?
Is LMI transferable to a new lender?
How much equity do I need to avoid LMI when refinancing?
Can I remove LMI without refinancing?
Do I pay LMI on an internal refinance?
What professions qualify for an LMI waiver on refinancing?
Is it worth refinancing to remove LMI?
How long does a refinance take?
Can I refinance if I am on a fixed rate?
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The information on this page is general in nature and does not constitute financial advice. Refinance eligibility, savings estimates, and loan terms vary between lenders and are subject to individual assessment. Savings figures are indicative only and based on typical market rates and LMI premiums as of February 2026. Refinancing may involve fees and charges. Always obtain personalised advice before making financial decisions.