Simple hacks to buy property with 10% deposit

You can purchase property with 10% deposit and avoid most of the LMI burden

Dentists can access home loan products that accept a 10% deposit while reducing or waiving Lenders Mortgage Insurance through specialist medical professional pricing. This makes the upfront cost closer to a standard 20% deposit transaction without the additional years of saving.

Most lenders apply full LMI when you borrow above 80% of the property value. For a dentist purchasing at a loan to value ratio of 90%, several lenders offer discounted or waived LMI as part of their medical professional packages. The qualification criteria typically include registration with the Australian Health Practitioner Regulation Agency and evidence of practice ownership or employment in a clinical role. The discount structure varies, but in our experience the saving ranges from 60% to 100% of the standard LMI premium.

Consider a dentist buying an owner occupied property who has saved a 10% deposit. Under standard lending, LMI on a 90% LVR loan would add several thousand dollars to the upfront cost. Under a medical professional package, the same transaction proceeds with LMI either waived entirely or reduced to a nominal figure. The dentist moves into the property years earlier without materially increasing the cost of the transaction.

Lenders assess income differently for practice owners versus associates

Lenders treat income from practice ownership and associate roles through separate assessment frameworks, and the distinction changes your borrowing capacity at the same deposit level.

An associate dentist earning a consistent salary receives straightforward serviceability assessment based on payslips and tax returns. A practice owner shows income through business financials and personal tax returns, which lenders assess using either the declared net profit or a combination of salary and distributions. Where a practice owner reinvests profit into equipment or staff rather than taking personal income, some lenders allow add-backs for depreciation and other non-cash deductions. This adjustment can lift borrowing capacity by 15% to 25% compared to a surface reading of the tax return.

If you've recently acquired or established a practice, loans for medical professionals allow some lenders to assess serviceability on forecast income rather than historical figures, provided the business plan and practice valuation support the projection. The deposit requirement remains at 10%, but the loan amount adjusts to reflect the realistic earning capacity of the practice rather than the transitional income shown in the first year of ownership.

Split rate structures reduce risk when borrowing at 90% LVR

Borrowing with a smaller deposit increases your exposure to rate movements, and a split loan allows you to lock a portion of the debt while retaining offset access on the variable portion.

A fixed rate on 50% to 70% of the loan provides certainty over repayments during the period when your equity position is lowest. The remaining balance sits in a variable rate loan with a linked offset account, so any surplus income reduces the interest charged without locking funds inside the loan structure. This combination is particularly relevant for dentists whose income includes performance bonuses, locum work, or irregular distributions from a practice, all of which benefit from offset functionality.

The alternative is fixing the entire loan amount, which removes flexibility during the years when your income is likely to increase. Fixing a portion instead of the full balance means you can make extra repayments into the variable component as your financial position strengthens without incurring break costs. Over a three to five year period, this approach builds equity faster than a fully fixed structure while still managing the risk of rate increases on the majority of the debt.

Offset accounts matter more at lower deposit levels

An offset account reduces the interest you pay without requiring you to commit surplus funds as extra repayments, and the value of this feature increases when your loan balance is larger relative to the property value.

At 90% LVR, every dollar in offset saves interest on a loan amount that represents most of the property value. For a dentist with variable income or practice cash flow sitting in transaction accounts, linking those funds to the home loan through an offset reduces the interest cost without locking the money away. The interest saving compounds over time, which accelerates equity growth and moves you below the 80% LVR threshold sooner.

Some lenders offer 100% offset on variable rate loans within their medical professional packages, while others cap the offset benefit at 99% or charge a higher interest rate for full offset functionality. The rate difference is typically 0.10% to 0.15%, which becomes immaterial once you hold an average offset balance above $20,000. If your financial position involves holding operating capital for a practice or accumulating funds toward future property or equipment purchases, borrowing capacity improves when the loan structure allows those funds to work against the mortgage debt without restriction.

Portable loans let you retain LMI waivers when you move property

A portable loan allows you to transfer the existing debt to a new property without reapplying or triggering a new LMI assessment, which protects the medical professional pricing you accessed with the original 10% deposit.

If you purchase with a 10% deposit under a medical professional package and later decide to sell and buy elsewhere, some lenders allow you to port the loan to the new property without reassessing LMI. The waiver or discount you received initially carries forward, even if the new purchase is at a higher price point. The condition is that the loan amount does not increase beyond the level that qualifies for the LMI waiver under the lender's medical professional criteria.

This feature becomes relevant when your circumstances change within the first few years of ownership. A dentist who purchases with 10% deposit and then relocates for a practice opportunity can move the loan across without incurring LMI on the new transaction, provided the LVR remains within the lender's medical professional policy. The alternative is discharging the original loan and applying for a new one, which may involve a fresh LMI assessment depending on the equity position at the time of sale.

Pre-approval confirms your position before you commit to a property

Home loan pre-approval establishes your borrowing limit and confirms the lender will accept a 10% deposit under medical professional terms before you make an offer.

Pre-approval involves a full credit assessment and income verification, with the lender issuing a conditional approval subject only to property valuation and final documentation. For a dentist buying with a smaller deposit, pre-approval removes the uncertainty around whether the lender will apply standard LMI or honour the medical professional waiver. It also confirms that your income assessment, whether as an associate or practice owner, supports the loan amount you need.

The validity period for pre-approval is typically three to six months, which gives you time to identify a property without rushing the decision. Once you make an offer, the lender completes the valuation and confirms the loan structure. If the valuation supports the purchase price, the loan proceeds on the terms set out in the pre-approval. If the valuation falls short, you have the option to increase the deposit, renegotiate the price, or withdraw without having committed funds to a transaction that cannot settle on the intended terms.

Call one of our team or book an appointment at a time that works for you to confirm your borrowing capacity with a 10% deposit and access the medical professional pricing that applies to your registration and income structure.

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