Key Takeaways
- Using the waiver lets eligible accountants buy with a 10% deposit and no premium, entering the market sooner and keeping savings available.
- Waiting for a 20% deposit means a smaller loan, lower repayments, less interest over time, and a thicker equity buffer.
- The right choice depends on how fast prices are moving, how long saving the extra deposit would take, and your comfort with higher leverage.
- The loan is assessed at the actual rate plus 3 percentage points either way, so borrowing capacity matters as much as the deposit decision.
For accountants who can have Lenders Mortgage Insurance waived, one of the more consequential decisions is whether to use that waiver and buy now with a smaller deposit, or hold off and save the full 20%. With variable rates around the 6% mark and prices holding firm, the choice is not just about avoiding a premium; it is a trade-off between buying sooner with more leverage and waiting longer for a stronger position. There is no single right answer, but there is a clear way to think it through.
Weighing the two paths against your own numbers and timing is something a specialist mortgage broker for accountants can help model. This article sets out what each option involves, the case for using the waiver, the case for waiting, and a framework for deciding which suits your circumstances.
The Two Paths in Plain Terms
Before weighing them up, it helps to be clear about what each option actually means. Both get you into a home; they differ in timing and risk. Lenders Mortgage Insurance (LMI) is the premium normally charged when you borrow more than 80% of a property’s value, and eligible accountants can have it waived, commonly up to 90% of the value. Using the waiver means buying now with a deposit as small as 10% and no premium. Waiting for a 20% deposit means saving until your loan sits at 80% or below, at which point no premium applies to anyone. The decision is really about whether the cost of waiting outweighs the cost of higher leverage.
The Case for Using the Waiver
There are sound reasons an eligible accountant might choose to buy now rather than wait, and they go beyond simply avoiding the premium. The advantages are mostly about timing.
Buying sooner means entering the market before prices potentially rise further, which in a climbing market can outweigh the benefit of a larger deposit, since the property you are saving toward may cost more by the time you reach 20%. Using the waiver also keeps more of your savings available for other purposes, such as an offset account, renovations, or a cash buffer, rather than tying everything up in a larger deposit. For accountants with stable, strong income, the higher repayments that come with borrowing more are often manageable, which makes buying now the more attractive option.
The Case for Waiting
Equally, there are good reasons to hold off and save the full deposit, and they are mostly about cost and resilience. Waiting is the more conservative path.
A 20% deposit means a smaller loan, so your repayments are lower, you pay less interest over the life of the loan, and your equity buffer is thicker, which gives more protection if property values fall. It also widens your choice of lenders and removes any reliance on a particular waiver policy. For an accountant who is close to a 20% deposit already, or who is uneasy about carrying higher leverage, the extra time to save can be worth the wait, particularly if prices in their target area are relatively flat.
A Framework for Deciding
Rather than treating this as a yes-or-no question, it helps to weigh a few specific factors that tend to tip the decision one way or the other. Working through them gives a clearer answer for your situation.
- How fast prices are moving: in a rising market, buying sooner with the waiver can offset the benefit of saving more; in a flat market, waiting costs less.
- How long the extra deposit would take: if reaching 20% is years away, the waiver’s value is greater; if you are months from it, waiting may be the simpler choice.
- Your comfort with leverage: a larger loan and thinner equity buffer suit some borrowers and not others, regardless of the maths.
- Your borrowing capacity: because the loan is assessed at the actual rate plus a 3 percentage point buffer set by the Australian Prudential Regulation Authority (APRA), a larger loan needs more capacity to service, which can itself shape the decision.
No single factor decides it; the answer comes from how they combine for you. For many accountants in a rising market with a deposit some way off 20%, the waiver wins; for those close to 20% or wary of leverage, waiting can be the steadier call.
What the Decision Doesn’t Change
Whichever path you choose, a few realities stay the same, and keeping them in view helps avoid framing the choice too narrowly. The deposit decision sits within a larger picture.
Either way, the lender still assesses your ability to service the loan at the actual rate plus 3 percentage points, so your borrowing capacity, credit history, and overall position matter regardless of the deposit. The other upfront costs of buying, such as stamp duty, legal fees, and inspections, apply on both paths and need budgeting. And in both cases, the saving or the cost is only one part of a sound decision, which is ultimately about buying a property you can comfortably hold for the long term.
Frequently Asked Questions (FAQs)
Is it better for an accountant to wait for 20% or use the waiver?
It depends on your circumstances. Using the waiver suits those who want to buy sooner, especially in a rising market or when 20% is years away, while waiting suits those close to a 20% deposit or wary of higher leverage. The right choice balances how fast prices are moving against your comfort with borrowing more.
Does using the waiver cost more in the long run?
It can, because buying with a 10% deposit means a larger loan than a 20% deposit, so you pay more interest over time and carry a thinner equity buffer. Against that, you avoid the premium and may buy before prices rise further. Whether it costs more overall depends on how property values move while you would otherwise be saving.
What if I’m only a year away from a 20% deposit?
If you are close to 20% and prices in your target area are relatively flat, waiting can be the simpler, lower-cost choice, since the benefit of the waiver is smaller when the extra saving is modest. In a fast-rising market, though, even a year’s wait can cost more in price growth than it saves, so the local market matters.
Does the waiver affect how much I can borrow?
Not directly, but borrowing more with a smaller deposit means the lender assesses higher repayments, tested at the actual rate plus a 3 percentage point buffer. So while the waiver removes the premium, your borrowing capacity still has to comfortably cover the larger loan, which can influence whether buying now is feasible.
Can I use the waiver now and build equity later?
Yes. Many accountants use the waiver to buy sooner and then build equity over time through repayments and any growth in the property’s value. This is a common reason to choose the waiver, though it does mean starting with higher leverage, which is the trade-off to weigh.
Are there costs besides the deposit either way?
Yes. Stamp duty, legal or conveyancing fees, inspections, and a cash buffer apply whether you use the waiver or wait. These should be budgeted alongside the deposit, since the total cash needed is more than the deposit alone on either path.
The Bottom Line
Whether an accountant should wait for a 20% deposit or use an LMI waiver comes down to a trade-off between buying sooner with higher leverage and waiting longer for a stronger, lower-cost position. The waiver suits those facing a rising market or a deposit still some way off, while saving the full 20% suits those close to it or wary of borrowing more. Either way, the loan is assessed at the actual rate plus 3 percentage points and the other costs of buying still apply, so the soundest approach is to weigh how fast prices are moving, how long saving would take, and your own comfort with leverage, rather than treating the premium alone as the deciding factor.