$20,000. That's roughly what most lenders charge in Lenders Mortgage Insurance when a couple buys a $1M home with a 15% deposit. Through Wity, that bill disappears — for any borrower, in any profession.
An 85% LVR no LMI home loan used to be the kind of thing Australian lenders reserved for doctors. Not any more. Through Wity, any borrower with a 15% deposit can skip LMI entirely, and this guide shows you what that is worth in real dollars, whether you're buying your first home, your third, or refinancing the one you're in.
First, the backdrop. The RBA lifted the cash rate in February, March and May 2026, held it at 4.35% in June, and meets again on Tuesday 11 August 2026. Rising rates thin out the crowd: auction clearance rates sat in the low 40s in June 2026 (Cotality), which hands a prepared buyer more negotiating power than they've had in years. Fewer rivals. No LMI on a 15% deposit. That alignment is worth acting on, not admiring.
What does 85% LVR with no LMI actually mean?
LVR is your loan as a percentage of the property's value. Borrow $850,000 against a $1M home and your LVR is 85%. Simple. Lenders Mortgage Insurance is the premium most lenders charge once your deposit drops below 20%, and it protects them, not you: on that same loan it typically runs $15,000 to $22,000, added to your principal so you pay interest on it for decades. The full mechanics are in our guide to how LMI works.
Through Wity, the calculation changes. Any borrower, PAYG or self-employed, first-home buyer or upgrader, can borrow up to 85% with no LMI. This is not a niche product from a small lender with a rate premium hiding behind the saving. It's a structured policy with a major bank at standard market rates, available through Wity.
| Loan amount | LVR | Typical LMI cost, waived through Wity |
|---|---|---|
| $600,000 | 85% | $8,000–$12,000 |
| $800,000 | 85% | $12,000–$16,000 |
| $1,000,000 | 85% | $15,000–$22,000 |
| $1,500,000 | 85% | $25,000–$35,000 |
The waiver sits alongside everything else a broker should be doing anyway: 45+ lenders compared for the rest of your structure, offsets, splits, the lot.
You've been told to save 20%. Who wrote that rule?
The 20% deposit rule isn't law. It's industry furniture: bolted down decades ago, and nobody thought to move it. Wity renegotiated it to 15% for any borrower, and once you see what the old rule costs in time, you'll understand why that matters more than the premium itself.
Follow the maths. Cotality's June 2026 Home Value Index put the national median at $937,722, with values up about 8.8% over the year to May 2026. On a $950,000 target home, that pace of growth is roughly $84,000 in twelve months. The final 5% of a deposit on that home is $47,500, and a couple saving $2,500 a month needs about 19 months to find it. The goalpost moves faster than the savings account. Buying at 15% with the LMI waived doesn't just save the premium; it can buy back those months of price growth.
We've watched buyers spend two years chasing the last $50,000 of deposit while the suburb they wanted, Kelvin Grove in inner Brisbane was one, added more than that over the same stretch. Painful to see. If you want the deposit question answered properly, start with how much deposit you need.
Sarah and Tom kept their $20,000
Sarah and Tom are buying a $1M home in Brisbane, where the median house price climbed 17.4% in the year to June 2026 to reach $1.118M (Cotality). They've saved $150,000. That's a 15% deposit, short of the 20% most lenders still assess against, and at almost any other lender the gap triggers roughly $20,000 in LMI, charged upfront and added straight onto their loan.
Through Wity, that LMI is waived. They keep the $20,000. And because the premium never joins their principal, they never pay interest on it either: over a 30-year term, the total saving is closer to $45,000 than $20,000. Most broker content stops at the upfront figure. The compounding is where the real money hides.
Based on typical scenarios. Individual outcomes vary.
Refinancing with less than 20% equity? You have options
Mortgage prison gets misreported. Your current bank cannot stop you leaving; any borrower can discharge a loan whenever they like, subject to break costs on fixed terms. The barrier is the new lender's assessment. Three things make a new lender decline you: an LVR above their 80% refinance threshold, APRA's 3% serviceability buffer (held at its 28 May 2026 review), which tests you at your actual rate plus three full percentage points, and circumstances that have changed since your original approval.
The 85% waiver reroutes that first barrier. If your equity sits at 17%, most lenders will say no or quote $15,000+ in LMI to move you; through Wity, you can refinance at up to 85% LVR with no LMI. For the serviceability barrier, the Wity Borrowing Power Assessment models your capacity across 45+ lenders rather than one bank's calculator, because buffer treatment, expense benchmarks and income shading vary between lenders far more than most borrowers expect. Owner-occupier refinancing is running near record levels in 2026, so you'd hardly be the first to test the market. See what moves your number in borrowing capacity explained.
So what's the catch?
Fair question. There is no hidden rate premium: the policy prices at standard market rates because it sits with a major lender, not a fringe one. You still pass a full assessment, though. Income, expenses and credit history all count, APRA's buffer applies, and since 1 February 2026 APRA's debt-to-income caps have limited how many new loans any lender can write above six times income, so capacity is worth confirming before you fall for a listing. When a lender asks for "genuine savings", they mean three months of bank statements showing the deposit didn't appear last week.
One more thing: the waiver removes the LMI, not the deposit. You still bring the 15%. Stamp duty and settlement costs still apply in most states too.
Should first home buyers use this or the 5% Deposit Scheme?
If you're buying your first home, two live pathways now exist. The Australian Government 5% Deposit Scheme (formerly the First Home Guarantee) lets eligible first home buyers purchase with a 5% deposit and no LMI, and since 1 October 2025 it carries no income caps and no place limits. It does carry property price caps: $1.5M in NSW, $950,000 in Victoria, $1M in Queensland. Our 5% Deposit Scheme guide covers eligibility in detail.
The 85% waiver plays a different position. No scheme price caps, no first-home requirement, and it works for the upgraders, investors and refinancers the 5% Deposit Scheme excludes. Plenty of Aussies will use both across a lifetime: the scheme for the first purchase, the 85% waiver for the moves after it. Starting out? The first home buyer guide for 2026 maps the whole sequence, grants and stamp duty included.
This month, price your position before the RBA's 11 August 2026 meeting resets the conversation again. Holding 15%? You may already be closer than the old rule told you, and a rising-rate winter with clearance rates in the 40s is the buyer-friendly stretch to test it in. The thresholds climb further for some professions: up to 90% with no LMI for senior professionals such as lawyers and chartered accountants, and for nurses, midwives and allied health, and up to 95% for doctors and dentists.
Buying your first place? Start here and we'll pair the waiver with the grants and schemes you're eligible for.
Want to see what 85% looks like against your deposit? Start the Wity questionnaire → Free, no credit check, two minutes.