Discounted home loans for engineers
Engineers are highly respected professionals and therefore can be eligible for special discounted interest rates. Check your eligibility for an engineer mortgage loan discount.
Benefits of home loans for engineers
Applying for a specialist engineer's mortgage could allow you to enjoy one or more
No Lender’s Mortgage Insurance (LMI)
Other special offers may be available to engineers, surveyors, geologists, and geophysicists applying for home loans.
A lower deposit/ higher Loan to Value Ratio (LVR)
Special offers may be available to engineering professionals applying for home loans.
Lower interest rates & discounted fees
Other special offers may be available to engineers applying for home loans.
Specialist home loans for engineers
Engineers are the building blocks of the Australian economy, and several lenders are willing to offer considerable discounts on home loans to engineers. As an engineer, you can also avail yourself of the flexible policies that lenders offer for members of your profession.
If you’re an engineer and in the market to purchase your dream home, find out whether you’re eligible for a waiver on Lenders Mortgage Insurance (LMI) and other special interest rate discounts. These were previously offered only to doctors, lawyers, and professionals from a few specific industries. However, after a change of policy, engineers can now avail themselves of discounts of up to 85 per cent on LMI.
What are the types of discounts and waivers that I can get as an engineer?
Several lenders view engineers as low-risk borrowers and are willing to offer them attractive home loan deals to get their business. If your annual income meets or exceeds $150,000, you stand a greater chance of enjoying these particular perks.
Most lenders will allow you to borrow up to 90 per cent of the value of your property, while also waiving LMI, thus helping you save thousands of dollars. Depending on your years of experience, annual income and savings, you could also negotiate better interest rates from the lender than advertised to the general public.
If you’re taking out a loan with a 90 per cent Loan-to-Value Ratio (LVR), some banks may waive their requirement of you proving that you have substantial savings. In fact, if you’re considering purchasing multiple properties at the same time, you could enjoy a higher exposure limit. This is the total amount of debt you can have with one or multiple lenders and makes you eligible for a higher loan amount.
If you’re in the mining industry and employed on a FIFO (fly-in-fly-out) basis, lenders are willing to be more lenient when applying their credit criteria. Most of these lenders also relax their income verification rules significantly because of your employment status. Also, if you’re considering buying your home or making an investment in a mining town, lenders are unlikely to impose any location restrictions either.
How do I check my eligibility for discounts and waivers on an engineer mortgage loan?
It’s actually quite simple to establish whether you’re eligible to receive a special interest rate discount as well as save on LMI on your home loan. If you fulfil the following criteria, you could soon be well on your way to purchasing your dream home.
Most lenders will consider your application for a home loan if you have worked as an engineer with your current employer for at least one year. Alternatively, you could also be a self-employed engineer with at least two years of work experience in the industry.
Your credit history also plays an important role in your engineer home loan application. A clean credit file, free from defaults, bankruptcies, etc., has a higher chance of working in your favour.
While not all lenders insist on this, demonstrating that you will be able to raise at least a 10 per cent deposit from your savings will be a definite advantage. This requirement indicates that you are in a position to cover the upfront costs such as the deposit, stamp duty and other ancillary purchasing costs.
Each lender will have its own set of lending policies and guidelines, and it’s important to understand these as best you can before applying for your loan.
Are all engineers eligible for the loan?
Typically, lenders don’t make any distinction between different types of engineers. All professionals from the industry are eligible for discounts on their interest rate, depending on their mortgage size.
However, certain associations and memberships could be mandated by some lenders, and it is a good idea to check those beforehand. These include:
- Mining engineers: Should be a member of Engineers Australia
- Surveyors: Should be a member of the Institution of Surveyors in the state where you work. Alternatively, you could be a member of the Surveying & Spatial Sciences Institute of Australia (SSSI)
- Mine surveyors: Must be a member of the Australian Institute of Mine Surveyors (AIMS)
- Quantity surveyors: Must be a member of the Australian Institute of Quantity Surveyors
- Geologists: Should be a Fellow of the Australian Institute of Geoscientists (FAIG)
- Geophysicists: Must be a Fellow of the Australian Institute of Geoscientists (FAIG)
Besides these professional bodies, you may hold a membership to another industry association. Before applying for your home loan, find out whether your membership makes you eligible for interest rate discounts. Of course, your income and the size of your loan will also play an important role in determining the final discount available. As a general rule, the larger your income, the more you can borrow.
What kind of savings on LMI can I expect on a home loan for engineers?
LMI is a safety net that protects the financial interests of the lender in the event a borrower defaults on repayment. It helps them recoup any losses if the sale of the property does not cover the loan amount.
LMI premiums, like any other insurance premium, are priced based on the possibility of the insured event actually occurring. Simply put, the greater the probability of the borrower defaulting on the mortgage where the lender suffers a loss, the more expensive the premium will be. Additionally, LMI premiums aren’t flat rates but are dependent on the size of the loan and the LVR, and therefore vary on a case-to-case basis.
Why do banks support engineers and offer discounts on home loans?
Engineering professionals are at an advantage when it comes to buying their own home. Lenders consider engineers, mining engineers in particular, to be lower risk borrowers than your typical borrower, due to several reasons. Mining engineers have higher than average incomes; have full-time employment prospects; and are generally known for their strong track record of repaying loans on time. So it isn’t at all surprising that most lenders would want to get a share of their business.
Depending on your particular situation and the guidelines of the lender, you may be eligible for one or all of the following special discounts:
- Significantly reduced interest rates that are much lower than the bank’s standard variable interest rate
- The ability to borrow a higher loan amount than most borrowers, improving your chances of securing that dream home you have your heart set on
- Not required to pay LMI, usually charged when borrowing more than 80 per cent of the value of their property saving you thousands in upfront costs
Engineers can enjoy this preferential treatment with these discounts which aren’t offered to the general public. You might want to speak with an experienced mortgage broker to help negotiate a great deal on your behalf.
Why is a mortgage broker valuable when applying for an engineer’s home loan?
If you take home a sizable salary and are a full-time employee, you’re already on your way to qualifying for a home loan to buy your dream property. But when you’re starting the home loan application process, you’ll want to have all the relevant information and advice from an experienced person like a mortgage broker can help.
You might not be aware that you have access to discounts that can possibly save thousands of dollars on your engineer mortgage loan..
Mortgage brokers have years of experience working with a range of lenders, so they know how to obtain the right home loan for different and unique borrowers. They’ve built a good rapport with different lenders and know the best ways to get you the maximum possible discount based on your current situation.
Home loan for engineers – FAQs answered
Are you an engineer, geophysicist or surveyor looking to purchase your dream home? Here are answers to some commonly asked questions regarding discounts and special interest rates that you may be eligible for.
How much money can I save by avoiding LMI?
LMI can be a sizable fee that you may need to pay upfront or add to your loan amount, with a $1.2 million property racking up an LMI amount of around $25,000. By avoiding LMI, you’ll be able to save yourself thousands of dollars.
The actual cost of the LMI premium you could be paying is calculated based on the value of the specific property you are looking to purchase.
What are the various discounts and special reduced rates that engineers can enjoy?
As an engineer, you might be eligible to have the LMI waived, and a specialist mortgage broker may also be able to negotiate other special discounts for you:
- Discounted interest rates
These are typically well below the bank’s standard variable rate and also lower than any interest rate discounts offered to the general public.
- Higher exposure limits
Exposure refers to the total debt you have and is taken into account when you apply for a home loan. Lenders will place limits on this exposure as it indicates that you may struggle to repay your loan. If you’re an engineer and are considering starting a property portfolio, you can benefit from high exposure limits. Which means you can be eligible to borrow more to purchase multiple investment properties at the same time.
Are all borrowers required to purchase Lenders Mortgage Insurance?
In most cases, only loans greater than 80 per cent LVR are required to pay for LMI. If you’re willing to put down a 20 per cent deposit (this is on top of other upfront costs), you might not be required to pay an LMI premium.
As an engineer, you may be able to have your LMI waived if you fit the lender’s eligibility requirements for that waiver.
Is LMI meant to protect my interests?
No, LMI protects the lender in the unfortunate event of payment default, and not the borrower. LMI covers any costs or losses the lender incurs if you default on your loan and they have to sell your property.
You can purchase mortgage protection insurance which protects you the borrower if you struggle to repay your home loan. You can also take out income protection insurance which will also assist if your employment situation changes due to health or other issues.
If you work on a contract basis as an engineer, you might consider mortgage protection or income protection insurance. It will help cover your loan if you’re ever unable to retain your contract work.