Do you know how LMI waivers work with trusts?

Why Some Double Bay Buyers Borrow Through a Structure

Some borrowers in Double Bay hold property or apply for home loans through a company or trust rather than in their own names. This is common among professionals who want asset protection, tax planning flexibility, or a structure that supports business interests alongside property ownership. When you're applying for a professional LMI waiver through NAB or CBA, the structure you borrow through determines whether the waiver remains available under the professional offer or whether it shifts to a standard assessment path.

The professional LMI waiver typically allows eligible doctors, lawyers, and accountants to borrow at higher loan-to-value ratios without paying lenders mortgage insurance. Both NAB and CBA support lending through structures, but they set out specific conditions the eligible professional must meet for the waiver to apply.

NAB's Requirements When a Company is the Borrower

When the borrowing entity is a company, NAB requires the eligible professional to be one of the directors, one of the shareholders, and to provide a personal guarantee. All three conditions must be satisfied. If the company is acting as trustee for a family or unit trust, the same three conditions apply: the eligible professional must be a director, a shareholder, and a personal guarantor.

Consider a Double Bay surgeon who owns property through a company structure. The surgeon is a director and shareholder but does not wish to provide a personal guarantee. Under NAB's policy, the LMI waiver application would not be assessed under the professional offer. Instead, it would be considered under NAB's standard LMI waiver process, which may carry different eligibility terms, LVR limits, or documentation requirements.

NAB's Requirements When Individuals Act as Trustees

When the borrowing entity is one or more individuals acting as trustee for a family or unit trust, NAB's policy requires the eligible professional to be a trustee and to provide a personal guarantee. The professional does not need to be a director or shareholder in this scenario because there is no company involved, but the personal guarantee remains mandatory.

This structure is common among professionals who hold investment property or the family home in a discretionary trust. The trust deed names the trustees, and NAB's condition is that the eligible professional must be one of those named trustees and must accept personal liability for the loan.

CBA's Approach to Trust Structures

CBA permits eligible medical professionals, accountants, and lawyers to borrow through a trust, provided the eligible individual is a director or trustee of the relevant entity. The loan must be linked to an active or pending Mortgage Advantage Package, and all standard business rules and credit criteria apply.

CBA's policy does not explicitly reference company structures or personal guarantees in the same way NAB's does, but it does require the eligible professional to hold a governance role within the entity. If you're a Double Bay professional considering a trust structure for property investment or upgrading your home, CBA's requirement is straightforward: you must be either a director or a trustee.

What a Personal Guarantee Means in Practice

A personal guarantee means you accept personal liability for the loan obligations of the borrowing entity. If the trust or company defaults on the loan, the lender can pursue you personally for the outstanding debt. NAB's policy requires this across all trust and company structures where a professional LMI waiver is sought.

The personal guarantee is separate from being a director, shareholder, or trustee. Those roles give you control or ownership within the structure. The guarantee places your personal assets at risk if the entity cannot meet its obligations. For professionals in Double Bay holding significant personal wealth or multiple properties, the guarantee is a material consideration when deciding whether to borrow through a structure or in personal names.

When Structure Conditions Are Not Met

Under NAB's policy, where the trust or company structure conditions are not satisfied, the LMI waiver application is assessed under the standard LMI waiver process rather than the professional offer process. The standard process may have different eligibility criteria, lower maximum LVRs, or require additional supporting documentation.

In a scenario like this, a Double Bay lawyer borrowing through a family trust where the lawyer is not listed as a trustee would not qualify for the professional LMI waiver under the professional offer. The application would be referred to NAB's standard waiver assessment. Approval remains subject to NAB's credit assessment regardless of which process applies, but the distinction determines which eligibility framework is used.

Professional Eligibility Still Applies Regardless of Structure

Trust and company structure eligibility does not override the underlying professional eligibility requirements. Under both NAB and CBA policy, the eligible individual must still be actively practising in the relevant profession, hold current registration or membership, and derive their primary source of income from that profession.

The structure criteria are layered on top of the professional eligibility criteria, not a substitute for them. If you're a Double Bay accountant borrowing through a company, you must meet the professional eligibility conditions first, then meet the director, shareholder, and personal guarantee conditions on top of that. Both sets of conditions must be satisfied for the LMI waiver to be considered under the professional offer.

Call one of our team or book an appointment at a time that works for you. We work with professionals across Double Bay who are structuring property purchases through trusts and companies, and we'll walk you through the specific conditions that apply to your situation and lender.

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