After losing Commonwealth Bank and ING, and facing an aggressive 5% Deposit Scheme, Helia is racing to redefine LMI’s role
Newly published financial results from Helia, Australia’s largest specialist LMI provider, underscore the existential challenges facing this important slice of the mortgage finance industry.
As Friday’s first-quarter results prove, Helia has faced a double punch of misfortunes in the past 12 months.
The government’s 5% Deposit Scheme – which allows first-home buyers to purchase a property without paying LMI – has surged in popularity following a major expansion in October 2025, when income limits were removed, house price caps were significantly lifted and annual quotas abolished.
The scheme’s expansion has proved highly controversial, with economists criticising it for driving up prices while failing to address the underlying cause of soaring housing costs – a chronic lack of supply. AMP chief economist Shane Oliver summed the mood up when he slammed the scheme as “totally ridiculous”.
Helia, which has seen its addressable market clipped since the expansion, has been clear in its thoughts of the scheme. Interim chief executive Michael Cant warned that the removal of income thresholds and the significant increase in property price thresholds are giving “taxpayer-funded support to wealthier borrowers”.
The feeling is mutual throughout a large segment of the mortgage broking population.
“Low-income earners no longer have the competitive advantage they once had, and instead we have rewarded high-income earners with bad saving habits by allowing them to purchase a home with a lower deposit and no LMI,” mortgage broker Joseph Daoud of It’s Simple finance told MPA.
Daoud does not believe the LMI route is the best mechanism for everyone, but there are advantages to paying LMI over using the First Home Guarantee.
“So long as the government remains a guarantor on the property you cannot make it an investment property,” he said. “The government can punish you if they were to find out it was used as an investment property (i.e. you were earning rental income from the residence). You can’t claim negative gearing against the property, meaning your property repayments are not tax deductible.”
LMI can get borrowers into the market sooner if they are intending to use the property as an investment with a higher borrowing capacity, explained Daoud. “If your intention is to use property as a wealth creation asset, then paying LMI should simply be the ‘cost of doing business’ and not a hindrance that you try to work around using a government scheme.”
Read more: First Home Guarantee could be driving up affordable home prices
Major clients jump ship
It’s not just the 5% Deposit Scheme weighing on Helia’s fortunes.
In March 2025, Helia announced that its cornerstone client Commonwealth Bank was dropping the group as its LMI provider in favour of smaller competitor Arch Lenders Mortgage Indemnity Limited.
Soon after, Helia announced that Australia’s sixth-largest home lender ING “has decided to proceed with negotiations with an alternate provider”.
At the time, Helia announced a “comprehensive business review” to plot a path forward without two of its biggest clients and the expanded 5% Deposit Scheme.
Arch took over as CBA’s (and subsidiary Bankwest’s) LMI provider on 1 February 2026.
It is thus unsurprising that Helia’s gross written premiums (GWP) were down 32% on a year-on-year basis in the first quarter, totalling $51 million, with insurance revenue dipping 9% to $84.3 million.
But Helia is optimistic that it can adapt to these challenges.
“While acknowledging the full impact of the 5% Deposit Scheme on the LMI market will not be seen until next year, there is still good reason to feel cautiously optimistic as we look ahead to 2026,” Helia’s chief commercial officer Greg McAweeney (pictured) recently told MPA.
“Property buyers will continue to navigate affordability pressures, however we do expect demand for home ownership to remain strong, supported by a continued desire to enter or progress within the market.
“These conditions create an environment where LMI can play an important role in helping buyers move sooner, even when saving a large deposit is challenging.”
McAweeney believes brokers “can continue to use LMI as a practical tool to help more buyers achieve their property goals”.
