How to Purchase Your First House as a Commercial Lawyer

Commercial lawyers typically have reliable income and clear career progression, but first home purchases still require decisions about deposit size, loan structure, and timing.

The primary advantage you hold is access to LMI waivers that reduce the deposit requirement from 20% to as low as 10% without additional insurance costs. This changes the deposit calculation and alters when you can realistically purchase. Beyond that, your application needs the same documentation and planning as any other buyer, but with specific attention to how your remuneration structure is assessed.

LMI Waiver Eligibility and What It Changes

Most lenders offering LMI waivers to legal professionals require admission to practice and employment with a recognised firm. Some extend this to senior paralegals or those within two years of admission, but the standard threshold is admission plus employment confirmation. The waiver means you can borrow up to 90% of the property value without paying insurance that would otherwise add several thousand dollars to your upfront costs.

Consider a commercial lawyer purchasing at the current median for an established house in a middle-ring suburb. With a 10% deposit and the waiver applied, the borrowing amount sits at 90% of purchase price. Without the waiver, the same loan would require an LMI premium that might reach five figures depending on the lender and loan size. That cost either increases your loan amount or reduces funds available for settlement.

Fixed Versus Variable Rate Decisions

You need to decide whether to fix all or part of your loan, or remain entirely variable. A variable rate with an offset account allows you to deposit your salary and reduce interest daily while maintaining access to those funds. A fixed rate locks your repayment amount for a set term, typically one to five years, but removes offset access and limits extra repayments.

In our experience, commercial lawyers with variable income or annual bonuses benefit from an offset arrangement where surplus funds reduce interest without being locked inside the loan. If you prefer repayment certainty and expect rates to rise, fixing a portion makes sense. Splitting the loan between fixed and variable allows you to hold some funds in offset while securing a fixed rate on the remainder.

Deposit Sources and Genuine Savings Requirements

Lenders distinguish between genuine savings, which you have held for at least three months, and gift funds from family. Most will accept a deposit that combines both, but they typically require at least 5% of the purchase price to come from genuine savings. The balance can be gifted, provided the gift is documented with a signed declaration confirming it is not repayable.

If you have been saving into an offset account linked to a family member's loan, or into a term deposit, those funds qualify as genuine savings once the three-month threshold is met. Funds from a recent bonus or tax return may not meet the requirement unless they have been held long enough. This is where planning three to six months ahead of your intended purchase avoids delays at application.

How Remuneration Structure Affects Serviceability

Lenders assess your capacity to service a loan based on base salary plus a portion of variable income such as bonuses or overtime. Most lenders will include 80% to 100% of variable income if it has been received consistently over two years and is evidenced in tax returns or payslips. If you are early in your career and your bonus history is short, lenders may reduce the percentage they include or exclude it entirely.

As an example, a lawyer with a base salary and a consistent annual bonus that represents 20% of total income will generally have that bonus income included at 80% to 100%, depending on the lender's policy. If your remuneration has recently increased due to a promotion, lenders may accept the new base salary immediately but apply a more conservative approach to projected bonus amounts until they are received and evidenced.

Pre-Approval and Its Role in Purchase Timing

Pre-approval gives you a conditional commitment from a lender before you make an offer. It confirms your borrowing capacity, identifies any documentation gaps, and allows you to move quickly once you find a property. Pre-approvals are typically valid for three to six months, depending on the lender.

The application requires payslips, tax returns, bank statements, identification, and evidence of your deposit. The lender will also run a credit check and assess your existing liabilities including credit cards, personal loans, and HECS debt. Once approved, you receive a letter stating the amount you can borrow, subject to a satisfactory property valuation. This does not lock in an interest rate unless you proceed to a formal application and rate lock.

Offset Accounts and Redraw Facilities Explained

An offset account is a transaction account linked to your loan. The balance in the account offsets the loan balance when calculating interest, so if you hold funds in offset, you pay interest only on the net amount. You can access offset funds at any time without restriction. A redraw facility allows you to withdraw extra repayments you have made into the loan, but access is controlled by the lender and may involve delays or fees.

For commercial lawyers who receive periodic bonuses, an offset account allows you to deposit those amounts and reduce interest immediately without committing them permanently to the loan. If you later need to access the funds for another purpose, they remain available. Redraw facilities offer some of the same benefit but with less flexibility, and some lenders restrict redraw access or remove it entirely on fixed rate loans.

First Home Buyer Concessions and Grants

Stamp duty concessions vary by state and are subject to property value caps. In most states, first home buyers purchasing below a specified threshold pay reduced or zero stamp duty. Some states also offer grants for purchases of new or substantially renovated properties. These concessions reduce upfront costs and may influence whether you purchase an established house or consider new construction.

You are eligible for these concessions if you have not previously owned property in Australia, you intend to occupy the property as your principal place of residence, and the property value falls within the relevant cap. The concession is applied at settlement, reducing the amount you need to pay to the state revenue office. You do not receive a cash payment unless a grant applies, in which case it is typically paid after settlement once occupation is confirmed.

Loan Features That Matter Beyond Rate

Rate is important, but loan features determine how the loan functions over time. Look for loans that allow unlimited extra repayments without penalty, offer a linked offset account, and do not charge ongoing monthly fees. Some lenders also allow you to increase your repayment amount or make lump sum payments without restriction, which shortens the loan term and reduces total interest.

If you plan to purchase an investment property in future, confirm whether the loan allows you to convert it to interest-only and add an offset account at that time. This avoids the need to refinance when your circumstances change. Portability is another feature worth confirming, as it allows you to transfer the loan to a new property without reapplying or paying discharge fees.

Purchasing your first property involves decisions about deposit, loan structure, and timing that affect both your upfront costs and long-term flexibility. Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions